At a recent Cabinet committee meeting, the central government allowed oil marketing companies (OMCs) to revise diesel prices “by a small quantity” to reflect demand-supply condition in the market.
Petroleum Minister Veerappa Moily told reporters after the meeting of the Cabinet Committee on Political Affairs that OMCs are authorised to make price corrections on diesel from time to time. Price correction can commence even from “today”, he added.
However, the government refused to term the move as de-regulation or even partial de-regulation. The petroleum ministry clarified that there was no discussion on the quantum of price increase or the period over which these changes are to be effected, at the cabinet committee meeting. He said this decision had been left to the oil companies.
The ministry also said that the government would continue to subsidise diesel, cooking gas and kerosene.
However, Finance Minister, P Chidambaram, maintained that oil companies had been allowed to make a ‘small correction’, while adding, “I am looking at the same subsidy bill as was expected earlier.” Petroleum Secretary GC Chaturvedi, re-confirmed that OMCs had been allowed to raise diesel prices in small quantities over a period of time. He did not give details about the time-frame.
Chaturvedi, however, emphatically said that the Government had not de-regulated diesel prices.
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