A 22 percent slump in oil prices this year and the end of state polls are emboldening India’s Prime Minister Narendra Modi to press ahead with politically risky decisions to lure investors and revive the economy.
His government freed diesel prices of state control for the first time in over a decade and raised tariffs on natural gas over the weekend in the biggest steps to curb subsidies and spur output. The changes build on Modi’s pledge to revitalize Asia’s third-largest economy as his party made gains in two provincial elections that may help bolster his power.
Modi, who has made energy security his priority, is lifting restrictions that contributed to a decline in natural gas output every month since the mid-2010, while deterring Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) from bidding for oil and gas blocks. The restraints on diesel prices have also idled retail fuel pumps operated by Essar Oil Ltd. (ESOIL) and Reliance Industries Ltd. (RIL)
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