Diesel price hike coming soon as govt clears deregulation, raises LPG cylinder quota to 9 from 6

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PTI: New Delhi, Jan 17 2013, 13:27 IST

prices. "If we are to deregulate, then diesel price will have to be raised by Rs 9.60 per litre, which is not the case. Only a small quantum of change has been permitted over a period of time."

Asked if it was partial deregulation, he said "it wasn't even partial deregulation." The government, he said, will continue to subsidise diesel, cooking gas and kerosene.

"The finance ministry will meet all of the under recoveries (loss)," he said.

State-owned oil companies sell diesel at a loss of Rs 9.60 per litre, kerosene at Rs 30.64 a litre and LPG at Rs 490.50 per 14.2-kg cylinder.

For the full 2012-13 fiscal, they are projected to lose about Rs 165,000 crore.

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COMMENTARY

VIVEK RAJPAL, STRATEGIST, NOMURA, MUMBAI

"Given oil companies still need to take the approval from government authorities, I am not too excited about this news. Though the first market reaction is positive, I really doubt the sustainability of such a reaction based on this news, especially once markets take a look at details."

RUPA REGE NITSURE, CHIEF ECONOMIST, BANK OF BARODA, MUMBAI "It's better to make step-wise adjustments rather than a one-off large scale adjustment. Earlier, when petrol prices were de-regulated, they hardly responded to market forces. Today's announcement will depend on how frequently and how genuinely OMCs respond to market forces."

ANOOP VERMA, BOND DEALER, DEVELOPMENT CREDIT BANK, MUMBAI "It is a positive sign. Everyone is

... contd.

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Reader's Comments (4)| Post a Comment

Fe Comment

H.Paul | 17-Jan-2013Reply | Forward

No benefit to our economy when we have so much of corruption in our country. Raising prices of diesel and other commodities might bring some temporary relief but all these benefits must be for the country and for masses. But rampant corruption is eating away everything and we are back to square one.

Is there any optimum balance betweeen Quantititave and Qualitative Analysis ensured, during the policy making in our Country??

Gaurav | 17-Jan-2013Reply | Forward

It is but natural; in fact it is essential for the Managers and the Economists to know their figures of the concerned indices, which influence the POLICY & DECISION MAKING PROCESS & FUTURE PREDICTION OF THE MARKETS. But, is there any real-time MARKET SURVEY done on the basis of likes & dislikes, and subjective responses of the population. I, personally think that either our eminent professionals are only concerned for their pay-checks or they are also paralysed by some MARKET FORCES through a DIVINE INTERVENTION. We import CRUDE OIL which in turn is converted to various PETROLEUM PRODUCTS for satisfying our daily needs. So, again the eternal struggle of HAVES & HAVE-NOTS come into the picture and asks us a question of who is going to sacrifice for the welfare of the NATION as a whole. Well, I know the harsh answer and hence I would like to leave this forum and allow the MARKET FORCES to take on from here. THANK YOU

Roadmap to ensure complete paralysis of the Indian population to silence Jingoism and awakened souls

Gaurav | 17-Jan-2013Reply | Forward

Well, if there is a loss of 1,60,000 crores then it should be immediately compensated by extracting the lost money from all the scams and re-calling all the black money stashed in the Swiss and other rogue International and National? Banks. This is the right time to twist the neck of this shameless Govt. when they are preparing the ground for hiking the price in pretext of introducing fear in the minds of people about an APOCALYPSO in the fiscal situation of our country. 'Kayamat ko hum salonse hamari kandho par leke jee rahe hain, ai kambakth sarkar...arre kahe ki sarkar yeh to napunsakon ki fauj hai!!!' If you have got the guts then prosecute all those scamsters in your Govt. and those who are sitting in the opposition. Now Mr.Tiwari (oops sorry he is the real BIMARI) will pop up and tell the risen masses to remain away from JINGOISM. Simultaneously, there would be a fumigation and injection campaign of promotion of silence and tolerance beyond the limits of human endurance.