Diesel price up by Rs 1.09 efective midnight

With the end of polling for the Lok Sabha today, oil marketing companies (OMCs) will increase diesel price by Rs 1.09 a litre exclusive of tax from midnight.

OMCs had been raising diesel prices by 50 paise a month since January 17, 2013, as part of a phased decontrol but the government did not allow them to increase the price for the last two months.

“A decision on revision in retail price for diesel shall be taken on receipt of further advice from the government,” an Indian Oil statement issued on March 31 had said.

The revenue loss to the three government-controlled OMCs had risen to Rs 6.80 a litre under-recovery on diesel from Rs 5.93 a litre at the beginning of April.

IndianOil had said the diesel revenue loss had fallen below Rs 6, the interim subsidy cap recommended by the expert group of Kirit Parikh, hence, the issue of monthly price rise is under consideration of the government and the matter has been referred to the EC.

The three state-run OMCs together suffered a revenue loss of around Rs 1,39,869 crore on sale of three controlled products - diesel, LPG and kerosene - last financial year with a net impact of Rs 40,000 crore after taking into account government subsidy and upstream discounts.

Though the phased decontrol of diesel price has been stalled, the OMCs have reduced petrol price twice this month. The price at Delhi came down by Rs 0.9 a litre and then Rs 0.85 a litre.

The ministry of petroleum and natural gas had earlier referred a proposal for deferring a diesel price hike to the Elections Commission. With the election notified on March 5, a model code of conduct becomes applicable on governments, political parties and their candidates till the election process is over.