Diesel prices should be deregulated: PM panel

“I think the sooner it (deregulation of diesel prices) is done the better... I think it should be done as early as possible,” Prime Minister’s Economic Advisory Council (PMEAC) Chairman C Rangarajan told reporters here.

The government had on June 25 deregulated petrol price and said the same for diesel will be done soon. But with inflation rate continuing to remain at unmanageable levels, the government put-off the decision as any further hike in diesel price would lead to cascading effect.

At present the retail price of diesel is Rs 2.87 a litre short of cost of production. Oil Secretary S Sundareshan earlier this week stated that “there is no thinking at this juncture” to deregulate diesel prices as “it will be unfair” to increase rates when inflation is already high.

Finance Secretary Ashok Chawla had also said that it will not be a wise or prudent thing to deregulate price of diesel at a time when inflation is running so high. Wholesale price inflation rose to 8.62 per cent in September from 8.51 per cent in the previous month.