Now Diesel May Be Dearer By 80 Paise/Litre

Diesel prices may go up by 80 paise a litre from today (May 13) as the Election Commission (EC) has turned down the Oil Ministry's proposal to put on hold the Cabinet’s decision to increase its rate in “small monthly doses” because the revenue losses on diesel had dropped below Rs 6 a litre two months ago, according to government officials.

At present, the revenue loss on the fuel is Rs 6.80 a litre and it is for the Oil Ministry to take a decision, an EC official said.

"With the proposed 80 paise hike, revenue loss on diesel is expected to be around Rs 5 per litre from May 16," a government source said.
The hike will also cover backlog as it was delayed due to the recently concluded polls, government officials said. The fuel price would increase drastically as the companies were not allowed to increase diesel prices for the past two months.

The government had allowed oil companies to increase diesel rates by 50 paise every month until their revenue losses are neutralised.
Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) frequently exercised their limited pricing freedom with the prior approval from the government. "There was an exception in April-May last year during the assembly elections in Karnataka. As a result, oil companies had to raise diesel rates by about Re 1 per litre after the polls," an HPCL executive said.