The government may consider increasing the diesel prices after presidential election on July 19. The hike in rates of subsidized fuels including diesel, LPG and kerosene has been discussed for some time and might get implemented post strategic elections.
The diesel rates were last increased on June 25 last year, after which the international crude oil rates have completed a full cycle of new high and new low in three years. Currently, the state owned oil companies are making a loss of Rs 10.33 per litre of diesel that is to be compensated as subsidy by the government. The ministry plans to lower the subsidy to Rs 5-7 per litre; so the diesel prices may go up by Rs 3 to Rs 5.
There won’t be changes in the petrol rates as they are deregularised and will be reviewed every fortnight. The government wants to increase the diesel rates to limit the subsidy and also try and control the dieselization of the country. However, the coalition government also has few parties opposing the hike, hence the raise might not be implemented at all under political pressure.
