Oil sector

Austerity’s pain

Print edition : February 22, 2013

At an Indian Oil outlet in Ahmedabad on January 17, when the government allowed oil companies to hike diesel prices. Photo: Amit Dave /REUTERS

State Transport Corporation buses filling diesel from a private outlet in Cuddalore, Tamil Nadu. Bulk consumers have to buy the fuel at market prices now. Photo: C. VENKATACHALAPATHY

The introduction of a dual pricing mechanism for diesel will compel bulk consumers to buy the fuel at market prices, and the overall impact of this on inflation cannot be underestimated. Reducing fiscal deficit cannot be an end in itself.
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