The government is not considering freeing diesel pricing from its control yet, Oil Minister Murli Deora said in Parliament on Tuesday.
“Currently, there is no proposal under consideration to fully decontrol the price of diesel,” Deora said in a written reply to a question in the Rajya Sabha.
State-owned Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp sell diesel at a rate, which is Rs 2.62 per litre below its imported cost, he said.
The government had, on June 26, decided to give public sector oil firms freedom to price petrol and diesel in line with cost. However, while petrol pricing was freed with immediate effect, for diesel it was stated that complete decontrol will be done in stages.
Deora said the move resulted in price of petrol going up by Rs 3.50 a litre in Delhi.
Besides, the government decided to raise the diesel price by an ad-hoc Rs 2 per litre even though the difference between the domestic retail price and imported cost of the fuel was almost twice that.
Since then, diesel rates have not been changed, Deora said, without saying as to when diesel pricing will be freed completely. Meanwhile, petrol price has risen by Rs 1.48 per litre on top of the June 26 increase, he said.
Deora said that for the current fiscal, the public sector oil marketing companies were projected to lose Rs 72,000 crore in revenues on selling petrol, diesel, domestic LPG and kerosene below cost.
But after the June 26 decision, when kerosene price was raised by Rs 3 per a litre and LPG rates went up by Rs 35 per cylinder, the projected revenue loss has come down to Rs 53,000 crore, provided crude oil (raw material for making these products) stays around USD 75 per barrel, Deora added.
“However, the OMCs’ actual under-recovery (revenue loss) will depend upon the movement of international oil prices during the current financial year,” he said.
Keywords: Petroleum Ministry