Diesel to be costlier in ‘small doses’
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The government on Thursday cleared "small" increases in the price of diesel in the coming days, while seeking to sweeten the pill by raising the cap on subsidised cooking gas cylinders from six to nine per household. The prices of LPG and kerosene remain unchanged.
Oil marketing companies are now free to raise the price of diesel as long as the increase is not large. The first of the hikes — in all likelihood, 50 paise per litre — could come as early as on Friday. There are also indications that bulk consumers like state transport corporations and the Railways might have to pay a higher price. A minor cut in petrol prices could be announced simultaneously.
The cabinet committee on political affairs (CCPA) considered political repercussions and the impact on the aam aadmi before deciding to stagger the increase in the price of diesel over several small doses.
The CCPA meeting considered the report of the Vijay Kelkar committee that had recommended wiping out the entire Rs 9.60 per litre subsidy on diesel through increases of Re 1 per litre every month. While agreeing that an increase was unavoidable, the meeting concluded that an attempt should be made to soften the blow.
The price of diesel was last revised in September 2012, when it was raised by a steep Rs 5.63 per litre. "We have given some liberty to oil marketing companies to raise diesel prices in small doses. They are authorised to make small price corrections from time to time," Petroleum Minister M Veerappa Moily said after the cabinet meeting.
"They should exercise this discretion in such a manner that inflation is not impacted. Also, the entire burden is not put on consumers," Moily added. Asked what "small" increases meant, the minister told reporters, "Small means small."