Need to look into dimensions of diesel deregulation: FM

Finance Minister P Chidambaram on Wednesday said that government will have to look into various dimensions of the issue before taking any decision on deregulating diesel prices.

"The government has to take into account several dimensions of issue before decision can be taken," he said, when asked about the possibility of deregulating diesel prices.

The issues concerning diesel are not unidimensional, the Minister said, adding while some argue for deregulation, the others say that it would fuel inflation.

"On one column (of a newspaper) you will say, deregulate diesel price and on another column you will say inflation (will rise). These are not unidimensional

issues, you cannot approach such an issue from one dimension," he said.

Overall inflation in November stood at 7.24 per cent, much above the Reserve Bank's comfort level of 5-6 per cent.

The government had in 2010 taken an "in-principle" decision to deregulate diesel prices, but could not implement it because of political pressure. The decision was based on the recommendations made by Kirit Parikh committee.

Price of diesel, which currently costs Rs 47.15 per litre in Delhi, was last revised on September 14 when it was hiked steeply by Rs 5.63 per litre.

The government has promised a cash support of Rs 30,000 crore (Rs 300 billion) to the oil marketing companies to cover a part of the Rs 85,586 crore (Rs 855.86 billion) revenue loss on fuel sales during April- September.