New Delhi, July 14: The government has decided not to deregulate diesel prices. This means diesel prices will not move in tandem with crude oil prices. Meanwhile, the public sector oil firms have decided to revise petrol prices once a month. However, there will be no change in petrol too for the month of July.
The stand-down on issue of diesel prices comes barely a few weeks after the government had announced it will deregulate prices of auto fuels. Political opposition to the move along with increasing inflation may have played a role in this backtracking. Diesel is used largely by the transport sector and a price hike pushes up prices of almost all other products, including food.
The decision was taken at a meeting called by the petroleum secretary, Mr S. Sundareshan. “Petrol price will be reviewed monthly after a mutual consultation among the three oil marketing companies (Indian Oil Corporation, HPCL and BPCL). There is no need for revision of prices now. We will follow this mechanism for three months from now,” said Indian Oil Corporation, director (finance), Mr S. V. Narasimhan.
After the government decided to decontrol the petrol prices, the OMC’s had been discussing how to implement it. It has also been decided that all the PSU oil marketing companies will sell the petrol at the same rate. This. despite Centre giving them the freedom to sell petrol at different prices.
The oil companies have not announced any particular date for price revision to prevent any hoarding by the black marketers, who may try to store the petrol in anticipation of a fuel price hike and create problems for the consumers.
When asked if there was any timeline for decontrol of diesel prices, Mr Sundareshan said: “No decision has been taken to decontrol diesel at this moment.” He was categorical that the diesel prices would not be decontrolled for now.
In June, an empowered group of ministers (EGoM), under the chairmanship of Union finance minister, Mr Pranab Mukherjee, had decided to decontrol petrol prices and had simultaneously raised the prices of key auto and cooking fuels — petrol, diesel, LPG and kerosene.
The prices of petrol, diesel and kerosene were raised by Rs 3.5 per litre, Rs 2 per litre and Rs 3 per litre respectively. The empowered group of ministers had also decided to eventually decontrol diesel prices at a later stage.