India's diesel subsidy wrecked havoc

India's policy of subsidising diesel, which (as was also pointed out by IMF) not only subsidised the rich rather than the poor but also took away the focus from conservation of a scare natural resource, has resulted in rising consumption of diesel.

In India, while petrol prices remained market determined, diesel (till it's very recent deregulation) was heavily subsidized. Hence, diesel demand remained high and whenever its prices fell as a proportion of petrol prices, demand rose even higher.