Diesel prices may be hiked by up to Rs 1 a litre

Again Fuel Company indicated to increase the diesel prices may be one rupee a litre. It supposed because the Election Commission rejected the Oil Ministry proposal made on the eve of elections to shelve the monthly increases in rates.

The Cobinet already restricted to Oil Company BPCL, HPCL and PSUs IOC of increases small monthly raises in the January 2013. The fuel Company again did not raise rates on May 1 even through the losses had climbed to Rs 6.80/l. Sources said the Ministry had at the time of shelving the April hike stated that an expert committee headed by Kirit Parikh recommended that government provide a fixed subsidy of Rs 6 per litre on diesel and so there was no need to raise rates if the revenue losses were below this threshold.

However, they made up by hiking diesel prices by 90 paise in the following month. Sources said the oil companies had decided not to raise petrol prices on May 1 even though rupee depreciated against the US dollar, thereby making imports costlier.