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Moily: Diesel prices to be deregulated in six months

Monthly increases in rates will continue as planned and there was no plan for a one-time steep hike.

Written by Press Trust Of India | New Delhi |
November 21, 2013 2:25:05 am

Diesel prices will be deregulated in six months with gradual price increases,oil minister M Veerappa Moily said today.

“In six months,diesel sector will be deregulated,” he said at the KPMG Energy Conclave here. State-owned fuel retailers,who control 95 per cent of the petrol pump sales,sell diesel at government-fixed rates,which are way lower than the cost of production. The government had in January this year allowed them to increase the price by up to 50 paisa a litre every month as part of a plan to gradually remove the subsidies given on the fuel.

“Under-recoveries (losses on diesel sales) had come down to Rs 2.50 because of monthly increases but they soared to Rs 14 as rupee depreciated sharply. Currently,under-recoveries on diesel are at about Rs 9.28 per litre,” Moily later told reporters.

He said the monthly increases in rates will continue as planned and there was no plan for a one-time steep hike of Rs 3 or 4 per litre to bridge the gap. Moily also said that India will launch auction of blocks in January. “In order to accelerate exploration,DGH (Directorate General of Hydrocarbons) has carved out about 86 blocks,for which necessary clearances are being taken from the ministries concerned. The offering of exploration blocks under NELP-X is likely to take place in the month of January 2014,” he said.

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