The correct answer is option 1: reduce the burden of subsidies given to the oil companies.

Deregulation of the price of petroleum products in India means that the government no longer controls the pricing of these products. Prior to deregulation, the government used to subsidize the price of petroleum products, which meant that they were sold at lower prices than their actual cost. These subsidies were given to oil companies to compensate for their higher production costs.

By deregulating the price of petroleum products, the government aims to reduce its subsidy burden. Subsidies were putting a strain on the government`s finances, as they required significant amounts of funds to be allocated. Deregulation allows the oil companies to determine the price of petroleum products based on market forces and their own production costs. This reduces the financial burden on the government and creates a more sustainable pricing mechanism for petroleum products.

It is important to note that while option 2, 3, and 4 may have some indirect effects on fuel consumption and prices, the main reason for deregulation in India is to reduce subsidies.