Decontrol of diesel prices ruled out
28 Oct 2010
The government on Wednesday ruled out decontrol of diesel prices in the near future, on the ground that that international crude oil prices are too high for such a move.
Petroleum secretary S Sundareshan, told reporters on Wednesday, ''Diesel price deregulation is not possible with the current crude oil prices. Deregulation will lead to retail price increase (of food and essential commodities) and it is unreasonable to expect it at this juncture.'' He was speaking on the sidelines of the economic editors' conference in New Delhi.
As recommended by the Kirit Parikh Committee, the government deregulated petrol prices at the refinery gate and at the retail level from 26 June. But diesel prices were not deregulated, though they were hiked by Rs2, and the government made vague promises to fully deregulate the prices soon.
''The June decision was taken when crude oil price was at about $74 a barrel. Since then the crude oil price has risen to $80-$83 a barrel. It will be unfair to expect that diesel price will be market-determined at these levels,'' the petroleum secretary said.
Deregulating the rates of diesel now would mean a further increase in the price of the fuel by Rs2.87 a litre. Diesel currently costs Rs37.71 a litre in Delhi.