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India Energy Subsidy Briefing July 2014

As part of its work on energy policy and sustainable development in India, the Global Subsidies Initiative publishes a regular briefing on issues related to energy subsidies.

Highlights in this issue include:

• The new Indian government led by Narendra Modi has continued to gradually increase diesel prices; a practice initiated by the previous government.
   
• In his first Union Budget, delivered in early-July, Modi pledged to overhaul food and fuel subsidies to bring the budget deficit to 3 per cent of GDP by 2017, without providing details on how this would be done.
   
• The government is reportedly considering gradual increases to subsidised LPG prices based on the model currently used for diesel price increases.
   
• A proposed new pricing formula for domestically produced natural gas prices has been shelved for three months while the new government evaluates its options.
   
• Delhi has banned the sale of kerosene as it seeks to make the state “kerosene free.