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India’s Misguided Fossil Fuel Subsidy root cause of Mafia Growth

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India’s Fossil Fuel Subsidies have led to a massive growth of the petrol and diesel mafia in the country.India gives subsidies on diesel,kerosene and cooking gas through its state owned petro/gas companies like BPCL,IOCL,HPCL etc.These subsidies have been given for a long time and have led to the growth of a parallel black economy in these products.They not only lead to capital misallocation but also to the massive illegal profits for a few.It is a well known fact that all petroleum pump owners adulterate petroleum ( which power most of the cars) with subsdized diesel and kerosene.This massive racket earns millions of dollars (if not billions) for a network of company officials,pump owners,government bureaucrats and politicians.The mafia is so strong and powerful that it thinks  nothing of burning alive a senior police official.The racketeers are so rich and well connected that despite common knowledge nothing gets done about it.

The news become national when a young and idealistic MBA from one of the premier colleges in the country went against the mafia and was killed.The culprits were only brought to book after a major media hue and cry however the systemic corruption continues as before.The root cause is the subsidy being given by the government.The State Owned Indian Oil Companies have been perpetual under-performers as they are forced  to subsidize the products on behalf of the government which sometimes compensates the losses and sometimes doesn’t.With high inflation,the current government has lost the courage to reform the billions of dollars in losses that are incurring.Meanwhile the Mafia rakes in the moolah and continues in its merry ways.

Malegaon official burnt to death during raid

The additional district collector of Malegaon, Yeshwant Sonawane, was on Tuesday burnt to death by the petrol and diesel adulteration mafia when he went to conduct a raid, police said. He had gone to Panewadi locality in Manmad in Maharashtra’s Nashik district for the raid when he was set on fire, police said.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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