Subsidised fuel weighs on India’s budget

Thakoo Bai Arwar is one of millions of poor Indians who waits for this time of the month, every single month.

It is when she can head to the government ration shop and buy her monthly supply of subsidised kerosene. She and her family depend on the low price of kerosene – a fuel that many low income Indians use for cooking or heating their homes.

Their lives depend on support from the state.


…At the ration shop, that sentiment is echoed by many others waiting for their turn to buy kerosene. There is a sense here out on the streets that these subsidies are here to stay for good.

This is India’s problem. People out on the streets depend on the lower price of essential fuels like kerosene and petrol to survive. But India buys 70% of its oil from international markets – and pays global prices for it.

Selling fuel to its citizens at an artificially low cost is taking its toll on the country’s economy. India sells gasoline, diesel and other consumer fuels at below cost – and is now starting to feel the heat as oil prices head towards $100 a barrel.

BBC