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New Delhi: India on Thursday decided to increase diesel prices by Rs 5
per litre but left kerosene and petrol prices untouched, on account of increase
in Excise Duty.
The increased prices will be effective by Thursday midnight.
The decision was taken by the Cabinet Committee on Political
Affairs (CCPA) headed by Prime Minister Manmohan Singh, late on Thursday
evening.
Now, a litre of diesel will cost Rs 50.11 in Bangalore, Rs
48.91 in Chennai, Rs 46.32 in Delhi, Rs 51.25 in Mumbai and expected to cost Rs
49.76 in Kolkata, after addition of 12.5 per cent VAT.
Besides, the CCPA decided to restrict the yearly supply of
domestic LPG to six cylinders per household, a decision which is bound to pinch
the common man.
The decision to hike diesel prices comes close on the heels
of Cabinet meeting scheduled tomorrow is set to give the long awaited push to
the UPA’s reforms agenda by easing FDI norms in civil aviation, power and
broadcasting sectors, besides moving proposals to divest equity in seven
state-run companies.
Diesel, domestic LPG and PDS kerosene rates have not been
changed since June 2011.
While the Congress core group cleared the fuel price hike at
its meeting last Tuesday, the party also seems to have succeeded in narrowing
down differences with allies on its economic policies.
Diesel price was last hiked in June 2011 by Rs 3 per litre.
During the fiscal year 2011-12, the three OMCs lost Rs 1,38,541 crore in
revenues on sale of diesel, LPG and kerosene.
To make up for the loss, the government gave Rs 83,500 crore
in cash assistance to the OMCs while upstream firms like the Oil and Natural
Gas Corporation (ONGC) chipped in with Rs 55,000 crore.
State-run Hindustan Petroleum, Bharat Petroleum and Indian
Oil Corporation were losing around Rs 15 per litre on the sale of diesel, prior
to Thursday’s decision.