Ministry of Petroleum and Natural Gas, Standing Committee on Petroleum & Natural Gas (various reports) (New Delhi: Lok Sabha Secretariat).
National Council of Applied Economic Research, 2005, Comprehensive Study to Assess the Genuine Demand and Requirement of SKO, (New Delhi).
Thornton, John, and Amine Mati, 2005, “Developments in Domestic Fuel Prices, Taxes and Subsidies in Selected Countries,” mimeo. (November) (Washington: Fiscal Affairs Department, International Monetary Fund).
Prepared by Enric Fernandez.
To this end, a high-level committee was formed in October 2005.
Fiscal year starts April 1.
In contrast, Japan, France, Germany, Italy, and some Eastern European countries, actually reduced their demand for oil over this period.
The trade balance deteriorated by 3 percent of GDP but this was mostly due to an increase in non-oil imports.
Full pass through would have had an additional direct one-off impact on the wholesale price index of 2½ percentage points.
IMF staff estimates suggest that a permanent $10/bbl increase is associated with 0.2–0.6 percent reduction in global GDP, depending on whether the shock is demand or supply driven. Adverse impacts on confidence would increase the magnitude of this effect.
In August 2004, the government approved a system whereby OMCs could adjust gasoline and diesel prices within a ±10 percent price band of a 3-month rolling average of import parity prices but the system never became operational.
Full pass-through prices are estimated by adding international petroleum prices, freight and insurance costs, import duties, excise taxes, distribution and marketing costs, and state sales taxes with information provided by the Ministry of Petroleum.
Mainly Indian Oil, Bharat Petroleum, and Hindustan Petroleum Corporations, which are refining and marketing companies.
Oil and Natural Gas Corporation, Oil India, and Gas India. Revenue shortfalls are estimated by staff based on the difference between actual prices and import parity prices.
In response to ballooning subsidy costs, Indonesia raised petroleum prices in October by more than 100 percent (kerosene by 186 percent).
State sales tax rates on petroleum products vary widely by state and product: 20–34 percent for gasoline; 9–31 percent on diesel; 0–12½ percent on kerosene; and 1–14 percent on LPG.
Staff estimates based on an increase in kerosene prices of Rs. 14; average consumption of rural households of Rs. 1,720 per month (based on NSS, 2005); and average consumption of kerosene of 46 liters per year (NCAER, 2005).
LPG is mostly used by relatively higher expenditure groups in urban areas for cooking. Only 5 percent of rural households use LPG. In urban areas, about 40 percent of households still use firewood or kerosene for cooking and likely to be poorer than LPG using households (NSS, 2005).
Rules vary by state but quotas usually depend on the type of ration card of the household (which is a proxy for income), and on whether the household uses LPG or not. Households get more than 80 percent of their kerosene demand from the PDS and this share varies little across household characteristics.