The Impacts of Diesel Price Increases on India’s Trucking Industry

In the fiscal year 2011–12, under-recoveries1 incurred by Indian oil-marketing companies for diesel rose to an all-time high of INR81,192 crore (US$15 billion) (Government of India, 2012a). Diesel constitutes 38 per cent of all petroleum products consumed in India, some 65 per cent of which are used in transportation activities (Anand, 2012). While a reduction in diesel under-recoveries will have significant fiscal and economic benefits for the economy as a whole, rising diesel prices will negatively impact industry and diesel intensive sectors. Earlier research by Integrated Research and Action for Development (IRADe, 2012) established that farmers and truck operators are among the most vulnerable to increases in diesel prices.