Diesel Pricing in India: Entangled in Policy Maze
Publication dateAug, 2012
DetailsReport submitted to the Global Subsidies Initiative (GSI) of International Institute of Sustainable Development
AuthorsMukesh Kumar Anand
The report identified the important economic activities that use diesel and discussed the contribution of those sectors in GDP. Other important petroleum products and, their limited substitution possibility in the extant technological setting were highlighted. The modal-mix for transportation in India were also discussed. The relevant policy agenda for diesel in the vision statement for hydrocarbon sector was presented along with a summary on evolution of petroleum products pricing regimes. The importance of petroleum taxes for public finance at the federal and provincial levels was discussed in the context of wider reforms in the administration of taxes. Impact of changes in diesel and/or petroleum prices, including taxes and subsidies, was explored along a few dimensions. Cost of diesel (and/or petroleum products) as a proportion of total cost of production was presented for certain users /sectors, and some suggestions on reform imperatives were offered.