Rs 3-5 diesel price hike in offing

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New Delhi: With oil subsidies mounting, petroleum minister petroleum minister M. Veerappa Moily on Thursday discussed with finance minister P. Chidambaram various options before the government including Rs 3-5 per litre hike in diesel prices and a cut in duties.
The government is also looking at the possibility of increasing oil imports from Iran to stabilise rupee as the Islamic nation is paid in Indian currency. India is currently facing a double whammy due depreciation of rupee and increase in crude oil prices after Syrian crisis, which has increased subsidy burden on petroleum products.
Moily said the under-recoveries which were estimated at Rs 123,000 crore last month may go up. “We are addressing that issue,” said petroleum minister.  Every one rupee depreciation in the rupee against the dollar adds Rs 8,000 crore to the under-recovery. Also one dollar per barrel increase in international prices results in Rs 4,800 crore additional outgo towards oil subsidy.
“We are all worried about rupee depreciation. All of us should all do our best to reduce the tension on the economy. We are discussing how we can conserve energy and reduce fuel consumption,” said Moily.
He added, “we have to ensure that we help the finance ministry to reduce the current account deficit (CAD).”