No big jump in diesel prices, says Moily

There is respite for common man with the government not planning any big hike in the diesel prices, despite the weakening of the rupee in the past week, exerting pressure on petroleum import bill.

“Diesel is on a little shaky wicket. The under-recoveries have gone up to Rs 5.50 per litre from close to Rs 3 earlier, but as of today there is a proposal to go in for more than 45-50 paisa per month hike,” Oil Minister Veerappa Moily said on Friday.

Moily also said he was confident that the fundamentals of Indian economy were strong and rupee depreciation was only a short-term phenomenon.

The under-recovery on diesel, or the loss of revenue for selling fuel below cost borne by the oil marketing companies, is Rs.5.5 per litre.

 Every depreciation of Re 1 against the United States dollar results in a burden of Rs 9,000 crore on the oil marketing companies. India imports 80 per cent of its crude oil and 25 per cent of its natural gas requirements.

In January, the government had authorised the oil firms to hike prices in small doses until their losses were cut to zero. Analysts feel if global crude prices soften and rupee stays range bound, the losses can be bridged within a year. The next revision in diesel prices is due on June 30.

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