Question

According to my textbook the calorific value of diseal is 50 wheras petrol is 47.If we go according to my textbook ,diseal has a higher calorific value than petrol.Then why is petrol still at a higher rate (cost) than diseal?

Answer 1

India is carried out by trucks which use diesel as fuel that means most of the commodities prices are significantly effected by the price of diesel, so govt. gives higher subsidy on diesel than on gasoline (petrol) making diesel cheaper than petrol in India. India is big country and many goods reaches a state after travelling thousands of kilometers. Even a slight increase in diesel price would increase price of most of the commodities and hence inflation.
Big part of India is rural, around 50-60% and diesel is consumed more in rural India, in trucks, buses, jeeps and most importantly in tractors for tilting farms. And most policies of Indian govt. are made keeping in mind its effect on rural India and farmers. They don't want to put or pass burden on poor rural India.