In an official statement, Indian Oil said state-run oil marketing companies (OMCs) raised the price of diesel by 45 paise excluding taxes with immediate effect.
It may be noted that the government allowed these firms to revise diesel prices in small quantities periodically to reflect market realities.
The statement from Indian Oil shows that the hike in diesel price would reduce under-recoveries by Rs 3,400 crore till March 2013. Based on the current prices and volumes, the decrease in the under-recoveries on annual basis on HSD (diesel) shall be around Rs 15,000 crore for OMCs as a whole, it said in the release.
Meanwhile, the companies reduced the price of petrol by 25 paise per litre. This comes soon after the OMCs hiked the price by 35 paise.
While the price of petrol is purely market-determined, diesel is still under government control, even though oil firms now have the freedom to make minor revisions in the price.
The government allowed the state-run OMCs to raise the price of subsidised diesel in small amounts every month. It has permitted the retailers to raise diesel prices by up to 50 paise every month, some agency reports show.
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