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Petroleum Pricing in India: Transition from APM to MDPM


  • Bandyopadhyay, Kaushik Ranjan


Given the paramount importance of petroleum for the Indian economy and its increasing import dependence on this front, domestic pricing of crude oil and petroleum products assumes enormous significance for the country. The pricing regime not only influences the cost of energy for the economy as a whole but also has significant implications on economic growth and welfare. A close look at the pricing regime in the petroleum sector in India reveals that for nearly two and half decades (from 1975 to 1997) the petroleum sector in the country was operating in a state of complete protection under Administered Pricing Mechanism (APM). It is only in 1998 that the sector embarked on a gradual transition to a regime of deregulation and open competition. The paper provides an in-depth examination of the domestic pricing regime for crude and petroleum products in India under APM and in the post-APM era.

Suggested Citation

  • Bandyopadhyay, Kaushik Ranjan, 2009. "Petroleum Pricing in India: Transition from APM to MDPM," MPRA Paper 25905, University Library of Munich, Germany, revised 2010.
  • Handle: RePEc:pra:mprapa:25905

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    References listed on IDEAS

    1. Gangopadhyay, Shubhashis & Ramaswami, Bharat & Wadhwa, Wilima, 2005. "Reducing subsidies on household fuels in India: how will it affect the poor?," Energy Policy, Elsevier, vol. 33(18), pages 2326-2336, December.
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    More about this item


    crude oil; petroleum products; pricing;

    JEL classification:

    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy


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