Diesel price to rise 50p/month; LPG cylinder cap set at 9/year
The government has asked OMCs to hike diesel prices by 50 paise per litre monthly from Friday, Reuters reported, quoting an official source. This would mean that it would take about 20 months for the subsidy on the fuel to be nullified, given the current level of under-recoveries. The government also freed the pricing of bulk diesel, which would reduce the subsidy on the fuel by 18%.
“As far as diesel is concerned, oil marketing companies have been authorised to make price corrections from time to time,” oil minister Veerappa Moily said after a Cabinet Committee on Political Affairs meeting, adding, “It (price correction) can commence even from today.” The minister did not elaborate on the quantum of price hikes or the periodicity, but the Kelkar panel had recommended diesel price hike of R1-1.50/litre per month. The CCPA obviously sought to be politically savvy by combining the two decisions.
Oil companies were cautious on hailing the decision, given their disappointing experience with a