- No objection to govt's proposal to raise LPG cap: Election CommissionDiesel price hike coming soon as govt clears deregulation, raises LPG cylinder quota to 9 from 6Won't factor diesel price hike in oil subsidy bill in FY'13: ChidmabaramOil shares gain up to 6.6%, Indian Oil Corporation, Hindustan Petroleum lead
litre, would raised in small dozes of 40-50 paise, excluding local levies like VAT, every month to make up for the whopping Rs 96,000 crore loss at current rates.
While the cut in petrol prices is likely to come into effect from midnight tonight, the increase in diesel rates may be effected over the weekend.
Sources said diesel price for bulk users in Delhi would be Rs 57.96 a litre and it would be revised on 1st and 16th of every month based on previous fortnight average oil cost. The same is the methodology followed for pricing of jet fuel (ATF).
Officials and ministers refused to call the CCPA's decision as deregulation but experts felt that this could be the beginning of such a course.
Moily said the decision to decontrol diesel was taken in June 2010 but was not implemented. "We have now given the liberty to oil marketing companies to go for small increases.
We have taken the first and decisive step. When it is to be totally deregulated, has been left to the oil marketing companies," he said when asked whether today's decision would amount to complete deregulation or partial deregulation.
Finance Minister P Chidambaram refused to enter into a discussion on the issue.
However, LPG and kerosene rates will not be changed.
There are indications that price of non-subsidised LPG, which has been frozen in November, will be allowed to come up to market levels.
Diesel, which currently costs Rs 47.15 per litre in Delhi, is currently sold at a loss of Rs 9.60 a litre.
Moily said the CCPA decided to raised the cap on supply of subsidised LPG from 6 to 9 cylinders of 14.2-kg each for every household in a year.
Subsidised LPG costs Rs 410.50 per 14.2-kg cylinder and any household requirement beyond the new cap of 9 cylinders is to be bought at near market price of Rs 895.50 per bottle.
After today's decision, consumers will get 5 subsidised cylinder instead of 3 in the period to March 31, 2013. From April 1, 2013 they will get 9 cylinders in a year.
The increase in cap would mean an additional subsidy outgo of Rs 9,300 crore annually.
India sets terms for diesel price hikes - source
(Reuters) Government has told state fuel retailers to raise diesel prices by 0.40 rupees to 0.50 rupees ($0.01) a litre every month to gradually align them with market rates, a source privy to the development said on Friday.