The diesel subsidy hole

Under-recovery on diesel as per the Indian petroleum ministry website was 10.94 a litre in February 2012 when the procurement price was 37.80 per litre ($122.06 a barrel). The diesel under-recoveries are expected to exceed 750 billion at average price of $95.66 a barrel while total annual shortfall due to fuel subsidies could exceed 1,200 billion ($24 billion).

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