Diesel rate decontrol decision reaches poll panel door; petrol price cut 75p

The reduction is effective from Monday midnight

The ministry of petroleum and natural gas has put the monthly diesel price rise decision on hold by referring the issue to the Election Commission (EC).

But it decided to allow companies to cut the petrol price 75 paise a litre from Monday midnight. The IndianOil Corporation (IOC) said, "The under-recovery on retail diesel is Rs 5.93 a litre, below Rs 6, the interim subsidy cap recommended by the expert group of Kirit Parikh. Hence, the issue of monthly price rise is under consideration of the government and the matter has been referred to the EC. So, a decision on revision shall be taken on receipt of further advice by the government."

The price of petrol was last revised 60p a litre on March 1. "Since the change, there has been a declining trend in global prices and the rupee-dollar exchange rate has been strengthening. The combined impact has resulted in the reduction in petrol price, being passed on to consumers."

Companies had the right to go for a monthly decontrol dose of rise in diesel prices by 50p a litre from January 17 last year. These have suffered an underecovery loss of Rs 1,41,000 crore for the current financial year for three sensitive petroleum products; IOC's is Rs 73,000 crore.

IOC continues to suffer underecoveries on sale of kerosene of Rs 34.43 a litre and domestic liquefied petroleum gas of Rs 505.5 a cylinder.