Optimized fuel economy and lower pollutant emission require accurate control of air-fuel ratio in both transient and steady state region. Most of the existing AFR control schemes use oxygen sensor output as feedback, having inherent transport delays and poor performance in cold start. To overcome these problems a model based air-fuel ratio estimation scheme using HOSM is developed, to provide a feedback signal to AFR control scheme that is independent of the problems mentioned above. The methodology adopted in this paper utilizes engine speed to estimate the air-fuel ratio of the SI engine. Data is taken from a production vehicle equipped with ECU complaint to OBD-II standards. The experimental results show that the estimated signal is in good agreement with the value found in literature. The proposed scheme can be used as virtual sensor for monitoring AFR and is simple enough to be easily implemented online.