The Government of India had opted to increase the price of diesel in India every month by 50 paise on every litre. This idea was formulated to cut the losses borne by oil companies established in India. Now the fuel price in India is close to international markets.
The oil ministry will increase the rate of diesel by 50 paise per litre. It is set to be decided on Sunday, however, they may decide to avoid it as assembly elections are scheduled to commence four states of India. Politicians could choose not to increase the price temporarily.
Arun Jaitley, Finance Minister, said, "If there are no international shocks in the oil sector, it is expected that in a year the government will be able to decontrol diesel fully." An official told source, "The timing for deregulation will be decided by the finance minister after considering the politico-economic situation."
The deregulation of diesel in India was introduced to bring its subsidy from INR 62,837 crore in 2013 to 2014, down to INR 19,584 in this financial year. It was the UPA led government that had opted to increase diesel price on a monthly basis by 50 paise per litre.
The Government of India had deregulated petrol prices back in 2010, however, did not do the same with diesel prices. They had partially deregulated diesel prices, though they still controlled price hikes. The deregulation of fuel is important, so we get more private investments in the sector.
Reliance and Essar Oil had joined recently the fuel industry, they were only present for three years. As they state run oil companies, were given several benefits and private fuel companies could not compete with them. However, the deregulation of diesel now could entice a comeback from them.
DON'T MISS: VIDEO OF THE DAY