The Economic Survey for 2011-12 tabled by Finance Minister Pranab Mukherjee in parliament Thursday has recommended higher diesel prices, saying the subsidised fuel is misused for running luxury vehicles and adding to pollution that affects human health.
The survey, in a chapter on sustainable development and climate change, said low prices and subsidies were providing “incentives for misuse, shifts to diesel use such as luxury sports utility vehicles (SUVs), escalating imports in an energy-insecure country and increased pollution loads”.
In the column, Are Diesel Prices too Low in India, the survey said: “Diesel prices need a large adjustment now as China, for example, has recently undertaken, given subsidies, pollution and public health costs. Charging high road and vehicle taxes is another option that Singapore uses.”
According to survey, diesel prices were 20 percent below predicted levels in the country in 2010. While global oil prices surged 45 percent from $80 per barrel brent prices in 2010 to $120 currently.
Survey also pointed out that diesel is a major source of pollution that causes asthma, cancer and heart disease.