In a mix reform measures, the government has finally approved deregulating subsidized diesel, lets retails to hike prices by 45 paisa per litre which will be follow every month till market rate wiped out.
The hike price will be effect from today as govt allowed proposal on Thursday evening.
Getting power to raise prices in small amounts from time to time, Oil companies will have to raise diesel prices by 50 paise per litre every month, including VAT that reaches around Rs 6 every year.
There is also cut the price of petrol by 25 paise per litre, Indian Oil Corporation announced.
The decision taken by Cabinet Committee on Political Affairs chaired by Prime Minister Manmohan Singh came with hike in the cap on subsidized cooking gas cylinders per household from six to nine a year, bowing to public pressure.
LPG Cap raising decision came with hike in price of non-subsidized domestic cooking gas by retailers upto Rs 46.50 which costs common man a cylinder for Rs 942.
Petrol cut translates into a reduction of 30 paise in price in Delhi to Rs 67.26 a litre with effect from midnight tonight.
However, Prices vary from city to city according to prevalent taxes or VAT rates.
Hike in diesel price seems to hike in price of commodities as transportation cost will go up.
As per Oil Ministry M Veerappa Moily, CCPA decision to allow oil companies to make “small changes” in diesel rates from time to time was necessitated.
The decision will help govt to save an estimated Rs 12,907 crore in annual subsidy which will be used for domestic cooking gas (LPG) whose rates along with kerosene have been untouched.