India said Saturday it was freeing diesel prices from government control, marking another step to ease the state's grip on the economy and propel reforms by the new pro-business government.
Prime Minister Narendra Modi's administration also sharply hiked natural gas prices to spur exploration in the fuel-import dependent nation. Huge energy imports contribute to India's trade deficit.
"The prices of diesel will be market-determined at both the retail and refinery gate level for all consumers" and move in tandem with international prices, the government said in statement.
This is a great move. The price of oil has dropped recently so the reform minded government in India gets rid of the subsidy for diesel. This will lower the governments burden and when prices adjust to the market forces if they rise then people will have to get more efficient. This will have ripple effects in the inefficient Indian economy. I continue to like India as a long term investment.