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Implications of fuel price deregulation on energy consumption of automobiles

Student name: Ms Aanchal Arora
Guide: Dr Kaushik Ranjan Bandyopadhyay
Year of completion: 2012
Host Organisation: The Energy and Resources Institute (TERI)
Supervisor (Host Organisation): Dr Atul Kumar
Abstract: Due to the Differences in levies, disparity exists in the price of petrol and diesel in India. Road transport in India is characterized by a historical asymmetry in the auto-fuel prices due to lack of parity between international and domestic fuel prices and artificial deflation of diesel prices relative to that of petrol. Petrol prices have already been deregulated but diesel price decontrol has been kept on hold. This continued to provide a growth in ownership and utilization of personalized vehicles and reduction in use of public mode of transport leading to higher energy consumption with negative spill-over on the environment. In this backdrop, the paper thus builds up a time series econometric model of car ownership and utilization in India and examines the possible implication of increase energy utilization on the automobile sector.