"Coal, diesel and kerosene are under-priced. Electricity prices are understated. There is case for moving towards rational energy prices. This is required for energy security," he said at a conference on sustainable energy.
According to Ahluwalia, energy security means reducing dependence of their imports and that is possible only when the energy is priced at par with global rates which would ultimately improve investments in the country's energy sector.
Elaborating further, he said state-run ONGC sells crude oil at USD 50 per barrel to state refiners whereas the price in the global market is over USD 100. "Thus, there would under-investment by the ONGC," he added.
Ahluwalia also said that India gives the subsidies as it first gives sops on energy and then provides incentives for buying energy-efficient equipments.
He was of the view that there is no scope for subsidies as these are already at a high level of 2.3 percent of the Gross Domestic Product (GDP) and India needs to cut it down by at least one percentage point to 1.3 percent level. He said that under Jawaharlal Nehru National Urban Renewal Mission (JNNURM), the local bodies like municipal corporation should have energy efficiency standards for building.
According to Ahluwalia by 2030, around 70 percent of the total commercial buildings would be newly constructed as the in the process of urbanisation, the population in cities would increase to 600 million from present estimates of 381 million people.


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