The government will decide on raising the retail prices of diesel and cooking gas (LPG) in a few weeks,the oil secretary said on Thursday,in a bid to cut the biggest item in its import bill and support the local currency.
India,the world’s fourth-biggest oil consumer,is considering a Rs 3-5 hike in the price of diesel,which accounts for more than 40 per cent of fuel use,government officials said last week,as the country looks to cut import costs by nearly $20 billion to trim a record current account deficit.
A recent sharp recovery in the rupee,which had hit a record low of 68.85 to the dollar on August 28,and a fall in global crude prices following an easing of geopolitical tensions — with an attack on Syria appearing less imminent — have taken off some pressure from the government finances,Oil Secretary Vivek Rae said.
Fuel price rises generally provoke stiff resistance from Opposition parties,and any increase now is expected to draw a bigger protest as India approaches a general election. The election must be held by May 2014.
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