Full diesel price deregulation in 6 months: Moily

Diesel prices in the country would be completely decontrolled within the next six months, petroleum minister M Veerappa Moily said today.

The minister, however, ruled out any one-time hike in diesel prices and said the present norm wherein prices are revised by 45-50 paise every month would continue, so that diesel prices become market-linked over the next six years.

''We are planning (to deregulate diesel in 6 months). We are already going in that direction. Rupee appreciation (against the dollar) and drop in international crude oil price, we will be in a position to completely deregulate. Rupee would stabilise. And there are ways to do it,'' Moily told media persons at the KPMG Energy Conclave in New Delhi.

However, with diesel under-recoveries at around Rs9.58 per litre as of the first fortnight of November, it is unlikely that PSU oil retailers cover the shortfalls in another six months with monthly hikes of 45-50 paise. 

Moily discounted fears that UPA allies may not support the move and expressed confidence that UPA III will form the next government at the centre, despite the price hike.

Moily's comments, however, boosted shares of public sector oil marketing companies, IOC and HPCL, which saw their stocks rally.

IOC was trading at Rs206.30, up 0.63 per cent, while the HPCL stock was up 1.10 per cent at around Rs216.75, at around noon on the BSE today.

Currently, public sector oil marketing companies selling diesel at around Rs 9 less than the market cost.