Reform of the Indian Energy Pricing Structure
Policy measure

In the 1980s, the Indian government reformed the pricing structures towards a market-oriented pricing system - the energy sectors in particular were targeted. In July 1991, the regulatory regime in India was liberalized to promote industrial competitiveness. Moreover, since 1993, pricing reforms have been implemented aiming at "the development of market-based prices to guide energy efficiency initiatives and to encourage international competitiveness. Energy prices were under reform generally towards market-based prices." (Yang, 2006)


"After 1993, private investors were allowed to import and market LPG and kerosene freely. Since February 1994, the import of low-quality coal has been allowed without restrictions on prices. While moving towards market-determined prices, coal prices were increased by 18% in 1993 and by an additional 8% in 1994. Import duties for coal were reduced to 25% by 1996. The prices of coking coal and the high-grade non-cocking coal have been deregulated since 1996. The Common Minimum National Action Plan for power that was approved in December 1996 stipulated that no sector should pay less than 50% of the average cost of power supply. Tariffs for industrial users are increased to cover long-run marginal costs of production, ranging from $0.075/kWh to $1.25/kWh. Controlled by the government, the prices of oil and oil products that are used in industrial sector reached the international price level." (Yang, 2006)

Implementation
No identified implementation measures.
Challenges
No identified challenges.
Outcomes
No identified outcomes.
References

Yang, M., 2006. Energy efficiency policy impact in India: case study of investment in industrial energy efficiency. Energy Policy, 34, pp. 3104–3114.