Why it makes sense to keep energy prices on par with international rates

Niti Aayog, government’s think tank, had in June 2017 released a draft National Energy Policy (NEP) after working on it for nearly two years. A final policy is not yet announced as changes are being made based on the feedback received by the think tank. Reports say that the policy will now incorporate aligning energy prices with international rates. This will be a big plus for the entire energy sector as producers like ONGC and OIL will be able to get international prices for their oil and gas output. Currently, they feed the downstream sector at a subsidised rate which is later paid back by the government. The report, however, clarifies that the impact of higher prices will not be felt by the segment of the society which still uses subsidi.....