Diesel prices to be deregulated in six months: Moily

Published: 20th November 2013 02:55 PM  |   Last Updated: 20th November 2013 02:55 PM   |  A+A-


Lifting subsidies would trigger spikes of up to 15 percent in retail prices of diesel and petrol. (File photo: EPS)


Diesel prices will be deregulated in six months with gradual price increases, Oil Minister M Veerappa Moily said today.

"In six months, diesel sector will be deregulated," he said at the KPMG Energy Conclave here.

State-owned fuel retailers, who control 95 per cent of the petrol pump sales, sell diesel at government-fixed rates, which are way lower than the cost of production.

The government had in January this year allowed them to increase the price by up to 50 paisa a litre every month as part of a plan to gradually remove the subsidies given on the fuel.

"Under-recoveries (losses on diesel sales) had come down to Rs 2.50 because of monthly increases but they soared to Rs 14 as rupee depreciated sharply. Currently, under-recoveries on diesel are at about Rs 9.28 per litre," Moily later told reporters.

He said the monthly increases in rates will continue as planned and there was no plan for a one-time steep hike of Rs 3 or 4 per litre to bridge the gap.

At current rates, it will take 19 months to wipe off all the losses on diesel sales. But Moily is pinning hopes on rupee appreciating and international oil prices cooling down for reducing this time window to 6 months.

The government had in June 2010 freed both petrol and diesel prices from its control. While petrol price have moved in tandem with cost barring occasional exceptions, diesel rates have not been aligned with cost.

Fuel prices were last revised on November 1 when petrol rates were cut by Rs 1.15 a litre on rupee appreciation while diesel price was hiked by 50 paisa.


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on are those of the comment writers alone. They do not represent the views or opinions of or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp