Diesel prices will rise by 40-50 paise every month: Moily
Diesel prices will be increased by 40-50 paise per litre every month until under-recoveries on the country's most used fuel are completely removed, Petroleum Minister M Veerappa Moily has declared.
Speaking to reporters on Friday, Mr. Moily said, "Until further orders, oil marketing companies can increase it (diesel price) by 40-50 paise (per litre) every month."
On January 17, the government decided to move towards deregulating diesel prices from state control by giving powers to state-owned oil companies to increase prices in small measures every month till all of their losses are removed.
Currently, diesel is sold at a loss of more than Rs 10.80 per litre. In January, oil companies increased the prices of the fuel by 45 paise per litre. Following the inclusion of VAT, the increase in Delhi came to 50 paise. In the national capital, diesel currently costs Rs 47.65 per litre.
But, Mr. Moily did not specify when the state-owned oil companies would announce the second price increase. However, he stressed that fishermen would be exempted from the category of bulk customers.
In order to save an estimated of Rs 12,907 crore in subsidy per annum, the recent retail price increase for diesel was accompanied by with a move to charge bulk consumers like the railways, state transport undertakings and armed forces, market prices, which are nearly Rs 10 per litre higher than retail prices.