Small diesels, like the go-getting Suzuki Swift, just can't get a break from the Government.

Drivers seeking a car that drank the least fuel were once forced to take the diesel route and live with the compromises - smoky exhausts, an idle that resembled a tractor's and sluggish performance.

But all that has changed. Modern petrol engines offer a reasonably frugal alternative. Hybrids boast a similar thirst to today's diesels, and those are now cleaner-burning, more refined and counter a petrol powerplant's top-end power with plentiful grunt at the speeds we normally travel at. What's not to like?

The Road User Charges system. A government-mandated spoiler, the RUC structure forces owners to pay a kilometre-based tax in advance, which is a fiddle, and is levied at a rate which penalises smaller, super-frugal diesels.

That's been proved at successive AA EnergyWise rallies. The car which required the smallest fill in 2010 was the Mini Cooper diesel, sipping 4.27l/100km for a cost at the pump of $92.34. Add $77.57 road user charges for the 1763km distance and the total was $169.92.


So the abstemious Mini cost more to cover the distance than the petrol winner, the bigger Honda Insight drinking 4.635l/100km for a cost of $147.83, with the road user charge included in the per litre cost of the petrol.

The 2008 rally was won by a diesel, VW's Polo Bluemotion geared for cruising and drinking 3.64l/100km for a total cost, including RUC, of $130.83.

The first four cars were diesels, the fifth a Honda Civic hybrid averaging 4.765l/100km at $156.92 in total; not much more than the diesel's cost despite the fact it used over 18 litres more go-juice.

Clearly, small diesels use less fuel, which you'd think should be encouraged, not penalised.

Which brings us neatly to this week's drive - Suzuki's Swift diesel, at $25,990.

It fields a 1.3 litre engine in place of the petrol's 1.4, and with a modest 55kW at 4000rpm the 70kW petrol trounces it in power terms.

But the diesel's 190Nm at 1750rpm blasts the petrol's 130Nm at 4000rpm into the weeds, and gives this tiny car a mighty punch at round-town revs, a punch you can make the most of given the five-speed manual transmission and Swift's deservedly renowned sweet handling.

Sure, it's a smidgen heavier than the petrol car and that weight sits up front, slightly blunting this Swift's dynamic sparkle. But that's not what puts buyers off.

Suzuki claims 4.2l/100km thirst. I thrashed the throttle and recorded a 5.0l/100km average - still less than the manual petrol's 5.5l/100km claim. But paying $48 tax per 1000km - the levy for any vehicle under 3.5 tons - puts the per kilometre cost close enough that the private buyers and small businesses which would benefit from a more frugal car will only consider the petrol.

Suzuki NZ general manager of marketing, Tom Peck, admits RUC means Swift diesel buyers won't save money, but the car is selling - to fleets and government departments with a diesel-only policy.