Hike in diesel prices likely after Prez poll

Jul 12, 2012 |

New Delhi

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Struggling to cope with the burgeoning fiscal deficit, the government on Thursday indicated that tough decisions, including upward revision in diesel prices, are in the offing after the July 19 presidential election.

The diesel subsidy burden on the government is estimated to be around Rs80,000 crores annually. A source in the oil ministry said: “A price increase is inevitable. But the date and time... nobody can say.”

Diesel prices haven’t been raised since June 25 last year, and PSU oil firms sell it at a loss of Rs10.33 a litre. “It (price increase) is on the radar for sometime now,” the source said.

Asked if diesel prices may be raised after the presidential election, the source said: “It’s your guess.” Though a high-powered ministerial panel had decided in principle to deregulate diesel prices, it is still tightly controlled by the government.

The Empowered Group of Ministers authorised to decide on diesel pricing has not met since June 25, 2011. It was earlier headed by Pranab Mukherjee, but after he left the government to contest the presidential election, the EGoM has not been reconstituted.

State-owned oil firms are unlikely to revise petrol prices in the next few days as the rupee and global oil prices are highly volatile.

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