India considers cutting import tax on biodiesel
August 19, 2009
In a bill introduced to India's Parliament on July 6, the Indian Ministry of Finance said it wants to reduce the duty on biodiesel imports from 7.5 percent to 2.5 percent, and exempt blended fuels from an excise tax on domestically produced goods.
Last year when India raised oil prices, citizens took to the streets in protest. The Indian government controls the country's fuel pricing mechanism, and despite the riotous episode in 2008, it has taken steps to deregulate the market in recent years. The state does, however, still heavily subsidize domestic prices of oil products such as diesel, LPG and kerosene for consumers. Demand for petroleum products in India has been influenced by the government's pricing schemes. Industry analysts point out that when diesel prices were significantly lower than other fuels such as gasoline, demand for diesel rose substantially, by as much as 25 percent between 2006 and the first half of 2008. A move towards adjusting tariffs to increase biofuels usage in a transportation fuels market as large as India's could be a boon for the biofuels industry.
Last year when India raised oil prices, citizens took to the streets in protest. The Indian government controls the country's fuel pricing mechanism, and despite the riotous episode in 2008, it has taken steps to deregulate the market in recent years. The state does, however, still heavily subsidize domestic prices of oil products such as diesel, LPG and kerosene for consumers. Demand for petroleum products in India has been influenced by the government's pricing schemes. Industry analysts point out that when diesel prices were significantly lower than other fuels such as gasoline, demand for diesel rose substantially, by as much as 25 percent between 2006 and the first half of 2008. A move towards adjusting tariffs to increase biofuels usage in a transportation fuels market as large as India's could be a boon for the biofuels industry.
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