Pricing of Petroleum Products

Diesel Pricing Policy

It is nearly one year, since the Expert Group submitted its report on "Pricing of Petroleum Products" and the Dual-Pricing policy of Fuel is reported to be under consideration of the Ministry of Petroleum and Natural Gas for about two years. An early decision is required, considering the following:

a)Though the subsidy on Diesel is basically meant for Agriculture, Goods Transport and Public Transport sectors, more than 30% of total diesel consumption is reported to be misused by Industry, captive Power Generators and Passenger Cars.

b) It may not be possible to adopt market determined Diesel Prices in the near future and it is difficult to ask gas stations to charge Diesel Car users, who do not deserve subsidized diesel, higher than other vehicles.

c)Therefore suggest that 10 to 15 % cess on the sale price may be imposed on diesel Cars, SUVs etc, in addition to corresponding increase in life-tax imposed by the respective State Governments, so as to compensate for the subsidized diesel used in life-time of Diesel Cars/SUVs, as part of dual fuel pricing policy.

d) The bulk users other than Railways and State Transport Corporations be charged market determined Diesel Prices, as part of a dual fuel pricing policy.

e)The Goods Transport by Road be discouraged gradually, by making Diesel expensive to the extent possible and to encourage goods transport by energy efficient and eco-friendly Railway Network, which needs to be encouraged by allocation of adequate funds from Five Year Plans, instead of Road Network.

f) The subsidy is being misused, by diverting the cheap subsidized Diesel as the substitute for Furnace oil and the Kerosene for adulteration of other fuels.

g)The subsidy burden on Kerosene for lighting purposes, can be eliminated, apart from avoiding health hazards / risks of Kerosene, by supplying stand alone Solar powered LED Lanterns with back up of Lithium Ion battery, having a life span of at least 5 years, for a cluster of households through MNRE

Decouple Supply and Consumption

Both Energy and Economic Policy must share a least-cost, resource-efficient emphasis. The current subsidized, supply-side focus exacerbates the causes of energy waste. And energy waste bleeds the economy. The wise Energy Policy creates both a healthier Economy and a healthier Environment.

_____________________________________________________________________