Explained: This article explains the political background, key decisions, and possible outcomes related to Explained : Crude tanker Jag Laadki reaches Gujarat and Its Impact and why it matters right now.
March 18, 2026
India should not try to limit gas price shock, economist tells DW
India should let gas prices rise naturally and help those most seriously affected, instead of keeping them artificially low, Rahul Ahluwalia, Director of the Foundation for Economic Development in Delhi, told DW.Â
“I think one of the issues that we are facing — unfortunately, that we often face — is that we attempt to insulate people from price shocks instead of trying to help them deal with it,” Ahluwalia said.Â
India’s public refiners have upped the price of Liquefied Petroleum Gas (LPG) cylinders by a moderate Rs 60 (50 cents) and maintained petrol and diesel prices despite a steep rise in the cost of crude.Â
“The problem with limiting the price shock is that nobody adjusts behavior according to how the price has risen or should have risen had the price shock been allowed to propagate. So as a result, people are not really reducing their own personal consumption of gas and some people are having to face shortages,” he said.Â
“The appropriate response would be, let the prices rise, help people out via direct cash transfers or something of the sort. And India now has one of the most advanced infrastructures for direct crash transfers in the world,” the economist added.
Ahluwalia said he did not anticipate any long-term difficulties for Narendra Modi’s BJP government despite the current pressure.Â
“Because the political pressure is rising, [that] is why we have seen attempts to control the price,” he said. “I don’t think that the government should suffer very much. There are no near-term elections in the future. Usually, you see that the voting public’s memory is very short,” he said.
While India won’t hold a general election until 2028, four key states and a union territory will hold assembly elections in April.