Diesel is mainly consumed in the transport, industrial and agricultural sectors. The price of transportation affects the economics of all other consumables that reach general public in a developing country like India. A country?s growth is powerfully linked to availability of fuels for transportation and power generation. Thus, India faces the major challenge of meeting the high demand of oil to meet the growing A 784168 needs. It is therefore important to have a long-term plan for development of alternative energy sources in a balanced manner by making optimal use of available land and manpower resources. It is significant to discover the feasibility of substitution of diesel with an alternative fuel that can be produced within the country on a massive scale for commercial utilization. At present, the potential alternative fuels are 1. Alcohols (Methanol and Ethanol), 2. Liquefied Petroleum Gas(LPG), 3. Compressed Natural Gas (CNG), 4. Hydrogen and 5. Vegetable oils.