A Note on Petrol Versus Diesel Transport An Assessment of a Policy Option

Abdul Majeed


The policy of higher tax on petrol than on diesel gasoline
encourages diesel transport. This may cause distortion and suboptimal
allocation. This note is aimed at testing this hypothesis empirically.
The First section briefly des¬cribes the petrol versus diesel argument.
In the Second section cost compari¬sons are made for two petrol and
diesel vehicles of comparable performance. The conclusion and policy
options are discussed in the Third section.

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DOI: https://doi.org/10.30541/v16i3pp.336-344


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