Government to deregulate diesel prices in the next six months
Posted on: 21/Nov/2013 10:00:11 AM
The government will deregulate diesel prices in the next six months. Oil Minister Veerappa Moily said, “Our determination to deregulate diesel remains unchanged. We hope to achieve this in six months.”
The government will have to raise pump prices by around Rs 10 a litre in the next six months if it wants to deregulate diesel and link it to market rates. While the minister said the government would continue to raise diesel prices by 50 paise every month, he ruled out a steep increase as it would stoke inflation.
According to the oil ministry`s data keeper, the Petroleum Planning and Analysis Cell, international diesel rates are hovering around $122 a barrel and average exchange rate is about Rs 63 per dollar.
Executives working in oil companies say only a major price hike could help in diesel price reforms, which are unlikely before the new government is formed in mid-2014. "The current gap between market rate of diesel and its pump price is Rs 9.69 per litre. It will take about 20 months to have the market price in the normal course," an executive said.
