Retail prices of petroleum products have risen sharply of late, given the recent flare-up in global oil prices. The government must not, in tandem, tamely slash taxes on petrol and diesel, leave alone re-introduce subsidy, in a bid to artificially bring down fuel prices and curry favour with the electorate.
The fact is that the country’s oil import bill has ballooned by over a third to $10.34 billion in December alone, and we do need proper price signals to proactively deter oil consumption and dampen runaway demand.
India is now the world’s third-largest oil consumer, with demand rising to 4.4 million barrels per day in 2017, and imports meet the bulk of the demand. The way forward is to tap the potential for efficiency increase to lower consumer prices, by opening up the retail market for oil. Read More…
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