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Diesel price hike after presidential elections on July 19: Source

A top Oil Ministry source says diesl price increase is on the radar for sometime now as the government plans to take bold measures to rein in run-away fiscal deficit.

BT Online Bureau        Last Updated: July 12, 2012  | 21:44 IST

Government is likely to raise diesel prices after presidential polls on July 19, as it plans to take bold measures to rein in run-away fiscal deficit.

A top Oil Ministry source said, "It (price increase) is on the radar for sometime now." Source also added, "Price increase is inevitable. But date and time, nobody can say."

Diesel prices have not been raised since June 25 last year, and state-owned oil firms sell the fuel at a loss of Rs 10.33 a litre.

Asked if diesel prices can be increased after the July 19 Presidential election, the source said, "it is your guess".

Though an high-powered ministerial panel had in June 2010 decided in-principle to deregulate diesel prices, the nation's most consumed fuel continues to be tightly controlled by the government.

The Empowered Group of Ministers (EGoM), which is authorised to decide on diesel pricing, has not met since June 25, 2011. The panel was previously headed Pranab Mukherjee, who last month resigned as Finance Minister to contest the July 19 Presidential poll.

The EGoM has so far not been reconstituted and it is not clear who will head it after Mukherjee's exit. The panel has representatives of ruling UPA's allies like Trinamool Congress and DMK.

The source said state-owned oil firms are unlikely to change petrol prices in next few days as rupee and international oil rates continue to be highly volatile.

"Oil marketing companies are not losing any money on petrol right now. But we have wait and watch for sometime," he said.

With PTI inputs

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