Oil marketing companies have increased the prices of diesel by Rs. 0.45 per litre (excluding VAT) with immediate effect from March 23. Interestingly, the news just came after the reduction in the prices of petrol by Rs. 2.5 per litre, which was reduced of late. This increase in diesel prices happens to be the third surge since January 17, the day when cabinet minister delegated the authority to State oil companies to increase the prices of diesel in small proportions every month until the subsidiary on this fuel is completely wiped out.
Post imposing the tax on diesel in the national capital, the fuel now cost with an increase of Rs. 0.51, whereas in Mumbai it has become dearer by Rs. 0.57. Considering the situation of other two metropolitans, Chennai and Kolkata, diesel prices have been increased by Rs. 0.55 and Rs. 0.53, respectively. Interestingly, oil companies reduced the petrol prices by Rs. 2.4 per litre on March 16 owing to the fall in the international prices of crude oil by more than $ 5 per barrel.
Sources close to the diesel price increase process revealed that post surge in the under recovery on Retail HSD clocked at Rs. 8.19 per litre, which clearly reflects that the prices of this fuel will continue increasing till the loss on government’s end is completely covered. Along with Retail HSD, oil marketing companies are also witnessing under recovery on sale of SKO (PDS) by Rs. 33.4 per litre and domestic LPG by Rs 439 per cylinder. The estimate for the ongoing year of under recovery on the sale of these 3 sensitive products for the department is Rs. 86400 crore (approximately). Considering the estimate of industry experts, the figure is expected to clock over Rs. 163000 crore.