Domestic prices of high speed diesel (HSD) are expected to move up marginally in December following an increase in international prices during October.
According to preliminary calculations by the ministry of petroleum and natural gas, domestic diesel prices are expected to rise around 12 paise a litre in December because of the hardening of international prices. Domestic HSD prices, which are revised every month, are linked to prices prevailing in the Gulf.
Diesel was available at an average price of about $163 a tonne in the Gulf in September. In October, the average price worked out to around $165 a tonne. This implies a 1.2 per cent increase in international prices in one month.
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As a result, the retail price of diesel in the capital is expected to rise to around Rs 10.42 a litre, against the current price of around Rs 10.30 a litre. Similarly, the price will increase from the current Rs 11.34 to Rs 11.46 in Mumbai, from Rs 10.53 to Rs 10.65 in Calcutta and from Rs 11.15 to Rs 11.27 in Chennai.
On November 6, the government had reduced the domestic prices of diesel by five-six paise a litre, since the retail prices were higher than the prevailing international prices.
The reduction would have been larger but for the fact that the government simultaneously announced an increase in dealers commission, which was factored in while deciding the revised diesel prices.