Eye on Karnataka Assembly polls,Moily pauses April diesel price hike

A key official said Moily personally ordered that the price of diesel be raised only after May 5

Written by Amitav Ranjan | New Delhi | Published: April 23, 2013 3:10:58 am

Yielding to political compulsions,the UPA has for the first time deviated from its oil sector reforms agenda,keeping in abeyance the nominal monthly increase in diesel price in April.

Sources said the petroleum ministry last week stopped state-run oil marketing companies (OMCs) from raising the price of diesel while allowing them to lower that of petrol by Re 1 a litre — even though the under-recovery on diesel stood at Rs 6.48 per litre.

A key official said Petroleum Minister Veerappa Moily personally ordered that the price of diesel be raised only after May 5,the date Karnataka — Moily’s home state — goes to polls.

However,the official said,the increase was unlikely to happen before May 10 — the day Parliament’s budget session ends,and two days after the counting of votes in Karnataka.

The price of diesel was left untouched during the first half of the budget session,and raised marginally only on March 22,after Parliament went into recess. Moily’s instruction goes against the January 17 decision of the Cabinet Committee on Political Affairs to empower the OMCs to raise diesel prices in small doses every month until the subsidy is eliminated.

Moily made the announcement himself,and diesel became dearer by 45 paise each month over the next three months. Sources said any move to cover for the April postponement in May too would go against the CCPA order,as the increase would then breach the mandated 45-50 paise ceiling.

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