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Diesel Pricing in India: Entangled in Policy Maze


  • Anand, Mukesh Kumar

    () (National Institute of Public Finance and Policy)


This paper identifies the important economic activities that use diesel and discusses the contribution of those sectors in GDP. Other important petroleum products and, their limited substitution possibility in the extant technological setting are highlighted. The modal-mix for transportation in India is also discussed. The relevant policy agenda for diesel in the vision statement for hydrocarbon sector is 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 is discussed in the context of wider reforms in administration of taxes. The impact of changes in diesel and / or petroleum prices, including taxes and subsidies, is explored along a few dimensions. Cost of diesel (and / or petroleum products) as a proportion of total cost of production is presented for certain users / sectors, and some suggestions on reform imperatives are offered.

Suggested Citation

  • Anand, Mukesh Kumar, 2012. "Diesel Pricing in India: Entangled in Policy Maze," Working Papers 12/108, National Institute of Public Finance and Policy.
  • Handle: RePEc:npf:wpaper:12/108
    Note: Working Paper 108, 2012

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    References listed on IDEAS

    1. Surender Kumar, 2009. "The Macroeconomic Effects of Oil Price Shocks: Empirical Evidence for India," Economics Bulletin, AccessEcon, vol. 29(1), pages 15-37.
    2. Bhanumurthy, N. R. & Das, Surajit & Bose, Sukanya, 2012. "Oil Price Shock, Pass-through Policy and its Impact on India," Working Papers 12/99, National Institute of Public Finance and Policy.
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    Cited by:

    1. David Coady & Rahul Anand & Adil Mohommad & Vimal Thakoor, 2015. "The Fiscal and Welfare Impacts of Reforming Fuel Subsidies in India," Working Papers id:6575, eSocialSciences.
    2. Anand, Mukesh Kumar, 2016. "Reforming fossil fuel prices in India: Dilemma of a developing economy," Energy Policy, Elsevier, vol. 92(C), pages 139-150.
    3. repec:eee:jeeman:v:86:y:2017:i:c:p:244-261 is not listed on IDEAS
    4. Anand, Mukesh, 2014. "Direct and Indirect Use of Fossil Fuels in Farming: Cost of Fuel-price Rise for Indian Agriculture," Working Papers 14/132, National Institute of Public Finance and Policy.
    5. Chugh, Randy & Cropper, Maureen, 2014. "The Welfare Effects of Fuel Conservation Policies in the Indian Car Market," Discussion Papers dp-14-33, Resources For the Future.
    6. Smith, Michael Graham & Urpelainen, Johannes, 2016. "Rural electrification and groundwater pumps in India: Evidence from the 1982–1999 period," Resource and Energy Economics, Elsevier, vol. 45(C), pages 31-45.
    7. Chugh, Randy & Cropper, Maureen, 2017. "The welfare effects of fuel conservation policies in a dual-fuel car market: Evidence from India," Journal of Environmental Economics and Management, Elsevier, vol. 86(C), pages 244-261.
    8. Rahul Anand & David Coady & Adil Mohommad & Vimal V Thakoor & James P Walsh, 2013. "The Fiscal and Welfare Impacts of Reforming Fuel Subsidies in India," IMF Working Papers 13/128, International Monetary Fund.

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