Diesel price will go up by 50 paise a litre, excluding taxes, from Thursday midnight, while petrol will become cheaper by Rs.1.15 a litre, the government-run oil marketing firm Indian Oil Corporation said.
This is the second cut in petrol prices in a month. Petrol price was lowered by Rs.3.05 a litre Oct 1 on account of softening of prices in international markets as well as strengthening of the rupee.
While the petrol price is market-linked and revised periodically depending on crude oil price in the international markets, diesel is subsidised and the government has allowed the marketing firms to hike it by a "small amount" every month.
"Even after the current increase, under-recovery on retail diesel shall stand at Rs.9.58 per litre," IOC, the country's largest oil marketing firm, said in a statement.
"The movement of prices in international oil market and INR-USD exchange rate is being closely monitored and developing trends of the market will be reflected in future price changes," it said.
A government panel headed by former Planning Commission member Kirit S Parikh Wednesday suggested an immediate increase of Rs.5 a litre in diesel prices.
However, the government is unlikely to implement the expert panel's recommendation due to political compulsions as elections are round the corner.
