IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v92y2016icp139-150.html
   My bibliography  Save this article

Reforming fossil fuel prices in India: Dilemma of a developing economy

Author

Listed:
  • Anand, Mukesh Kumar

Abstract

Over the period between 1990–1 and 2012–3, fossil fuel use on farms has risen and its indirect use in farming, particularly for non-energy purposes, is also growing. Consequently, both energy intensity and fossil fuel intensity are rising for Indian agriculture. But, these are declining for the aggregate Indian economy. Thus, revision of fossil fuel prices acquires greater significance for Indian agriculture than for rest of the economy. There are significant differences across crops. The crop-level analysis is supplemented by an alternative approach that utilizes a three-sector input–output (I–O) model for the Indian economy representing farming, fossil fuels, and rest of economy. Fossil fuels sector is assessed to portray, in general, strong forward linkages. The increase in total cost of farming, for a given change in fossil fuel prices, is estimated as a multiple of increase in direct input cost of fossil fuels in farming. From the three-sector aggregated economy this multiple was estimated at 3.99 for 1998–9. But it grew to 6.7 in 2007–8. The findings have stronger ramifications than commonly recognized, for inflation and cost of implementing the policy on food security.

Suggested Citation

  • Anand, Mukesh Kumar, 2016. "Reforming fossil fuel prices in India: Dilemma of a developing economy," Energy Policy, Elsevier, vol. 92(C), pages 139-150.
    • Handle: RePEc:eee:enepol:v:92:y:2016:i:c:p:139-150
    DOI: 10.1016/j.enpol.2016.01.039
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421516300398
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2016.01.039?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jayatilleke S. Bandara, 2013. "What is Driving India’s Food Inflation? A Survey of Recent Evidence," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 14(1), pages 127-156, March.
    2. Surajit Das & Sukanya Bose & N. R. Bhanumurthy, 2014. "Oil Price Shock, Pass-Through Policy and its Impact on India," India Studies in Business and Economics, in: Ratan Khasnabis & Indrani Chakraborty (ed.), Market, Regulations and Finance, edition 127, chapter 13, pages 231-253, Springer.
    3. Anand, Mukesh Kumar, 2012. "Diesel Pricing in India: Entangled in Policy Maze," Working Papers 12/108, National Institute of Public Finance and Policy.
    4. Voigt, Sebastian & De Cian, Enrica & Schymura, Michael & Verdolini, Elena, 2014. "Energy intensity developments in 40 major economies: Structural change or technology improvement?," Energy Economics, Elsevier, vol. 41(C), pages 47-62.
    5. Ganguly, Kavery & Gulati, Ashok, 2013. "The Political Economy of Food Price Policy: The Case Study of India," WIDER Working Paper Series 034, World Institute for Development Economic Research (UNU-WIDER).
    6. Channaveer & Lokesha, H. & Hugar, L.B. & Deshmanya, J.B. & Goudappa, S.B., 2011. "Impact of MGNREGA on Input-use Pattern, Labour Productivity and Returns of Selected Crops in Gulbarga District, Karnataka," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 24(Conferenc), November.
    7. Kavery Ganguly & Ashok Gulati, 2013. "The Political Economy of Food Price Policy: the Case Study of India," WIDER Working Paper Series wp-2013-034, World Institute for Development Economic Research (UNU-WIDER).
    8. Swift, Zhicheng Li, 2006. "Managing the effects of tax expenditures on the national budget," Policy Research Working Paper Series 3927, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tumala, Mohammed M. & Salisu, Afees & Nmadu, Yaaba B., 2023. "Climate change and fossil fuel prices: A GARCH-MIDAS analysis," Energy Economics, Elsevier, vol. 124(C).
    2. Ju, Keyi & Su, Bin & Zhou, Dequn & Wu, Junmin, 2017. "Does energy-price regulation benefit China's economy and environment? Evidence from energy-price distortions," Energy Policy, Elsevier, vol. 105(C), pages 108-119.
    3. Henseler, Martin & Maisonnave, Helene, 2018. "Low world oil prices: A chance to reform fuel subsidies and promote public transport? A case study for South Africa," Transportation Research Part A: Policy and Practice, Elsevier, vol. 108(C), pages 45-62.
    4. Vietha Devia SS, 2019. "Analysis of Crude Oil Price and Exchange Rate Volatility on Macroeconomic Variables (Case Study of Indonesia as Emerging Economic Country)," International Journal of Business and Administrative Studies, Professor Dr. Bahaudin G. Mujtaba, vol. 5(5), pages 257-271.
    5. Majidpour, Mehdi, 2022. "Policy lessons from the execution of fuel dual-pricing: Insights for fuel-subsidizing economies," Energy, Elsevier, vol. 247(C).
    6. Pal, Debdatta & Mitra, Subrata K., 2016. "Asymmetric oil product pricing in India: Evidence from a multiple threshold nonlinear ARDL model," Economic Modelling, Elsevier, vol. 59(C), pages 314-328.
    7. Nihit Goyal, 2021. "Limited Demand or Unreliable Supply? A Bibliometric Review and Computational Text Analysis of Research on Energy Policy in India," Sustainability, MDPI, vol. 13(23), pages 1-23, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anand, Mukesh, 2014. "Direct and Indirect Use of Fossil Fuels in Farming: Cost of Fuel-price Rise for Indian Agriculture," Working Papers 14/132, National Institute of Public Finance and Policy.
    2. Rudrani Bhattacharya & Abhijit Sen Gupta, 2018. "Drivers and impact of food inflation in India," Macroeconomics and Finance in Emerging Market Economies, Taylor & Francis Journals, vol. 11(2), pages 146-168, May.
    3. Bhattacharya, Rudrani & Chowdhury, Sabarni, 2021. "How effective is e-NAM in integrating food commodity prices in India? Evidence from Onion Market," Working Papers 21/336, National Institute of Public Finance and Policy.
    4. K. U. Gopakumar & Vishwanath Pandit, 2017. "Food inflation in India: protein products," Indian Economic Review, Springer, vol. 52(1), pages 157-179, December.
    5. David Coady & Rahul Anand & Adil Mohommad & Vimal Thakoor, 2015. "The Fiscal and Welfare Impacts of Reforming Fuel Subsidies in India," Working Papers id:6575, eSocialSciences.
    6. Kozicka, Marta & Kalkuhl, Matthias & Saini, Shweta & Brockhaus, Jan, 2014. "Modeling Indian Wheat and Rice Sector Policies," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169808, Agricultural and Applied Economics Association.
    7. Ginn, William & Pourroy, Marc, 2022. "The contribution of food subsidy policy to monetary policy in India," Economic Modelling, Elsevier, vol. 113(C).
    8. Weber, Regine, 2015. "Welfare Impacts of Rising Food Prices: Evidence from India," 2015 Conference, August 9-14, 2015, Milan, Italy 211901, International Association of Agricultural Economists.
    9. McKay, Andy & Tarp, Finn, 2014. "Distributional impacts of the 2008 global food price spike in Vietnam," WIDER Working Paper Series 030, World Institute for Development Economic Research (UNU-WIDER).
    10. McCorriston, Steve & MacLaren, Donald, 2016. "Parastatals as instruments of government policy: The Food Corporation of India," Food Policy, Elsevier, vol. 65(C), pages 53-62.
    11. Bhattacharya, Rudrani & Sen Gupta, Abhijit, 2015. "Food Inflation in India: Causes and Consequences," Working Papers 15/151, National Institute of Public Finance and Policy.
    12. Rahul Anand & Mr. David Coady & Mr. Adil Mohommad & Mr. Vimal V Thakoor & Mr. James P Walsh, 2013. "The Fiscal and Welfare Impacts of Reforming Fuel Subsidies in India," IMF Working Papers 2013/128, International Monetary Fund.
    13. Kenneth Baltzer, 2013. "International to Domestic Price Transmission in Fourteen Developing Countries During the 2007-08 Food Crisis," WIDER Working Paper Series wp-2013-031, World Institute for Development Economic Research (UNU-WIDER).
    14. Thangzason Sonna & Himanshu Joshi & Alice Sebastin & Upasana Sharma, 2014. "Analytics of Food Inflation in India," Working Papers id:6174, eSocialSciences.
    15. William Ginn & Marc Pourroy, 2022. "The Contribution of Food Subsidy Policy to Monetary Policy in India," Working Papers hal-02944209, HAL.
    16. Baltzer, Kenneth, 2013. "International to Domestic Price Transmission in Fourteen Developing Countries During the 2007-08 Food Crisis," WIDER Working Paper Series 031, World Institute for Development Economic Research (UNU-WIDER).
    17. Svetlana Vladislavlevna Lobova & Aleksei Valentinovich Bogoviz & Yulia Vyacheslavovna Ragulina & Alexander Nikolaevich Alekseev, 2019. "The Fuel and Energy Complex of Russia: Analyzing Energy Efficiency Policies at the Federal Level," International Journal of Energy Economics and Policy, Econjournals, vol. 9(1), pages 205-211.
    18. Löschel, Andreas & Pothen, Frank & Schymura, Michael, 2015. "Peeling the onion: Analyzing aggregate, national and sectoral energy intensity in the European Union," Energy Economics, Elsevier, vol. 52(S1), pages 63-75.
    19. Zaim, Osman & Uygurtürk Gazel, Tuğçe & Akkemik, K. Ali, 2017. "Measuring energy intensity in Japan: A new method," European Journal of Operational Research, Elsevier, vol. 258(2), pages 778-789.
    20. Akash Malhotra, 2018. "A hybrid econometric-machine learning approach for relative importance analysis: Prioritizing food policy," Papers 1806.04517, arXiv.org, revised Aug 2020.

    More about this item

    Keywords

    Agriculture; Fossil fuel; Inflation; Input–output analysis;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:92:y:2016:i:c:p:139-150. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.