India frees up diesel prices - minister

NEW DELHI (Reuters) - India announced on Saturday that it would lift controls on diesel pricing with immediate effect, leading to an immediate fall in pump prices of nearly 6 percent and easing the subsidy burden on Prime Minister Narendra Modi's government.

"Henceforth, like petrol, pricing of diesel will be market determined," Finance Minister Arun Jaitley said after a cabinet meeting.

The 3.37 rupees ($0.05) a litre cut in prices of diesel, triggered by falling global oil prices, will help ease inflation that has already fallen to a multi year low.

"We have decided to reduce prices and in Delhi, prices are likely to go down by 3.37 rupess a litre from midnight tonight," said B. Ashok, chairman of Indian Oil Corp, the country's biggest fuel retailer.

The move is likely to boost the role of private market players like Reliance Industries and Essar Oil in India's retail arena.

(Reporting by Nidhi Verma; Editing by Douglas Busvine)