Diesel price hike will rid India of under-recovery soon: Montek Singh Ahluwalia
Planning Commission today said that the under-recoveries on account of sale of diesel will end by mid-2015 following progressive increase in the price of the fuel.
"Diesel is on a progressive elimination of subsidies and by mid-2015, present under pricing of diesel will be removed," Planning Commission Deputy Chairman Montek Singh Ahluwalia said in his address at India Energy Congress here.
The government recently partially decontrolled diesel prices, allowing oil marketing companies (OMCs) to raise prices by about 40-50 paise per litre every month to recover their loss of about Rs 10 per litre on selling the fuel at
subsidised rates currently.
Ahluwalia said the management of energy resources in a world of scarcity is a big challenge.
"Rich countries can afford to have energy subsidies because it will not prevent them from becoming richer. But poorer countries, that want to get richer, cannot continue
with it," he said.
Ahluwalia said that from a political point, it was a difficult message to convey (to raise diesel prices).
"The (energy) resources are scarce and finite and the capacity for growth and our ambitions are very high," he said, adding that domestic endowment of energy will not be sustainable without renewable resources of energy.
"We can't look at energy as an isolated issue...we have to get power, coal, gas all working together. It will not be possible to manage energy demand without energy efficiency."
Ahluwalia said there is a need to stimulate supply of non-conventional resources of energy as it is a must to have continues supply of energy.
He also said the
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