Private sector oil companies have welcomed the government’s decision to deregulate diesel prices.
“We welcome the government’s decision to deregulate diesel. This will not only help in controlling the fiscal deficit but also be advantageous for the consumers as they will now pay market rates for the fuel which is lower by more than Rs. 3 per litre. This will also leave more money with upstream companies for investment in the exploration and production sector, thereby enhancing our efforts for energy security for the country,” L.K. Gupta, MD & CEO, Essar Oil, said.
“Diesel deregulation will also bring the retail network of private oil marketing companies into system. This will increase competition, benefiting the end consumer.” Chandrajit Banerjee, Director-General, Confederation of Indian Industry, said: “The government’s decision to deregulate diesel prices is a step in the right direction as it will help cut subsidies and balance the fiscal deficit in the long run. This was long overdue. Also, subsidies should be better targeted and not be for those who don’t require it.” Now private sector oil companies such as Reliance and Essar Oil will reopen all their diesel filling stations. Currently, Reliance is selling diesel at only 14 of its 1,432 fuel retailing stations, most of which are closed down.
Over-recoverySimilarly, Essar is selling diesel at few of its 1,400 stations. These companies have been operating a handful of their diesel filling stations because of over-recovery in diesel prices in the past two months following the fall in international oil prices. Some of the private filling stations are selling petrol, the price of which was decontrolled in 2010.
