OMCs will revise price every month until losses are wiped out

The Centre is seized of some State governments’ directive to their transport undertakings (STU) to line up at retail outlets for refuelling following the removal of subsidy for bulk consumers of diesel, Petroleum Minister M. Veerappa Moily said on Friday.

Talking to reporters here, Mr. Moily said he had heard that States such as Gujarat and Tamil Nadu had asked their STUs to collect diesel at retail pumps instead of buying it directly from the oil marketing companies — as has been the current practice so far — in order to avoid paying the market price mandated for them

“We need to look into the issue… When rules are laid down, there are people who find ways of circumventing them. Instead of buses being asked to refuel at petrol pumps, the States should reduce high local sales tax or VAT on diesel to cut prices.”

Giving firm indications that diesel would become costlier, the Minister said the OMCs would revise prices by 40-50 paise a litre every month until they completely wiped out the present subsidy component of Rs. 10.80 on sale of the fuel.