Diesel price was on Friday hiked by 45 paise per litre, the third increase in the rate of nation’s most consumed fuel since January.
Diesel price will be hiked by 45 paise, excluding VAT, from midnight tonight, Indian Oil Corp (IOC), the nation’s largest oil firm, announced.
In Delhi, diesel price will go up by 51 paise per litre after including local sales tax or VAT, to Rs. 48.67 per litre from tomorrow as against current rate of Rs. 48.16.
The government had in January authorised State-owned oil firms to hike diesel prices by small doses of up to 50 paise per litre every month till such time that their losses on the fuel sale are completely wiped out.
Oil firms, which hiked diesel prices by equal measure of 45 paise on January 18 and then on February 16, were to hike rate on March 16 along with a Rs. 2.40 per litre cut in petrol price. But the companies deferred a decision on diesel to avoid the government blushes in Parliament.
With Parliament adjourning today for a month long break, oil firms raised diesel prices.
IOC said even after the hike, oil firms are losing Rs. 8.19 per litre.
In addition, the oil firms are losing Rs. 33.43 per litre on sale of kerosene through the PDS system and Rs. 439 on every 14.2-kg LPG cylinder sold for domestic consumption.
Oil firms are likely to end the fiscal with an under-recovery or revenue loss of Rs. 1,63,000 crore on diesel, LPG and kerosene sale. Revenue loss for IOC alone is estimated at Rs. 86,400 crore.
Since January, diesel price has been hiked by over Rs. 1.50 per litre in three instalments.
Diesel will cost Rs. 54.83 per litre in Mumbai from tomorrow as against Rs. 54.26 currently.
IOC said diesel prices have been hiked with effect from midnight tonight by “Rs. 0.45 per litre, excluding VAT, in line with the flexibility given by the Government to oil marketing companies (OMCs) to revise the diesel prices.”
Retail diesel prices were last revised upward by Rs. 0.45 per litre, excluding VAT, on February 16.
After today’s hike, the losses on diesel have come down from Rs. 8.64 per litre to Rs. 8.19 per litre, it said.
Price of petrol, which the government had decontrolled or freed in June 2010, were cut by Rs. 2 per litre, excluding VAT from March 16 due to fall in international oil rates.
After including VAT, the reduction in price of petrol in Delhi comes to Rs. 2.40 per litre and the fuel cost Rs. 68.34.
On that day, it was expected that oil firms would also effect the monthly hike of 40-50 paise per litre in diesel rates but they deferred the decision to save the government from trouble in Parliament.
When oil firms had on the previous occasion hiked petrol price on March 2, the Opposition parties had disrupted one full day’s proceedings.
The cut in petrol price follows two rounds of hike in rates since February. Petrol price was hiked by Rs. 1.50 a litre on February 16 and then by Rs. 1.40 per litre from March 2. Both the increases were excluding local VAT.