Diesel prices up by Rs. 5/ltr, petrol, kerosene and LPG untouched

Government has finally bite the bullet. In a clear signal to limit ballooning Fiscal deficit  Diesel prices are being raised by Rs. 5 per litre. However rates of Petrol, Kerosen and LPG remains unchanged.

Cabinet Commitee on Political Affairs (CCPA) announced the price hike in Diesel and various other changes.

Key takeaway from the diesel price hoke is as follows

• Fuel price hike effective midnight tonight
• Diesel price hike of 5 rupee/ltr is exclusive of VAT
• Branded diesel fuel to be sold at markets rates
• PSUs to save 5.3 rupees/ltr on petrol excise duty cut
• Govt caps subsidised LPG to 6 cylinder/consumer per yr
• PSUs to notify price of non-subsidised LPG on monthly basis
• PSU oil cos’ FY13 revenue loss seen 1.67 lakh crore rupees

Today’s hike is inevitable as Government finance is under tremendous pressure due to Fuel subsidy. It will also seen as reformist measure and breaking the general view of policy paralysis.