LPG cylinder price hiked over Rs 46 as govt pushes 'reforms'
State-owned oil companies in a parallel cut petrol price by 25 paise a litre in view of softening in global oil rates.
IOC Chairman R S Butola said the decision on diesel rate increase for retail and bulk consumers will cut subsidies by about Rs 15,000 crore on an annualised basis, and by Rs 3,400 crore in remainder of FY'13.
On the other hand, the move to increase supply of subsidised LPG would result in hike in subsidy by Rs 10,000 crore, he said, adding that the net result of the two decisions would be a cut in subsidy by about Rs 5,000 crore.
Before yesterday's decision, the oil firms had projected to lose Rs 1,56,601 crore in revenue on sale of diesel, LPG and kerosene at below market prices.
Butola termed the government decision as "practical and pragmatic" and said the oil companies will review diesel prices every month and take decisions on raising prices "based on ground realities".
He did not elaborate.
While the base hike in diesel price was 45 paisa, it will lead to an increase of 50 paisa in Delhi after including local VAT. It is costing Rs 47.65 a litre from today as against Rs 47.15 previously.
Similarly, while the base rate cut on petrol was 25 paisa, it will translate into a reduction of 30 paisa in price in Delhi to Rs 67.26 a litre.
Prices vary from city to city due to differential local sales tax