Diesel prices hiked by 50 paise per litre

Diesel prices were on Saturday hiked by 50 paise a litre, excluding state levies, the second increase in rates three weeks.

The monthly hike in price came after several rounds discussions that the new Oil Minister Dharmendra Pradhan held with state-owned oil firms on continuing with the reform initiated by the United Progressive Alliance government.

The announcement of the hike gave clear indications that the Bharatiya Janata Party government will continue with reforms of the previous Congress regime.

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The UPA had in January 2013 decided to raise diesel prices in small doses of upto 50 paise every month till such time that the subsidy on nation's most consumed fuel is eliminated.

The hikes, effective from midnight on Saturday, are excluding state sales tax or value added tax and actual increase will be higher and will vary from city to city, the oil companies announced.

Diesel price in Delhi will be hiked by 57 paise after including taxes, to Rs 57.28 per litre, while it will cost Rs 65.84 a litre in Mumbai as against Rs 65.21 at present.

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Price of diesel were last hiked on May 13 when rates went up by Rs 1.09 a lite, excluding local levies.

That hike which translated into Rs 1.22 in Delhi after including VAT, made up for rate hikes for two months as government deferred rates in April because of general elections.

Before Saturday's increase, diesel prices had risen by a cumulative Rs 9.55 a litre in 15 instalments since January 2013.

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"Even after the current increase, under recovery (loss) on retail diesel shall stand at Rs 2.80/litre," Indian Oil Corporation, the nation's largest oil firm, said in a statement announcing the hike.

Besides diesel, the oil firms are losing Rs 32.87 a litre on kerosene and Rs 432.50 on LPG (per cylinder).

Following the diesel price hike, a huge rise in gas price is expected soon.

"For the year 2014-15, the Corporation is expected to incur under-recovery of around Rs 53,600 crore (Rs 536 billion) on sale of three sensitive products (Industry around Rs 101,700 crore or Rs 1,017 billion)," the statement said.

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Following are the revised prices of diesel in four metros after oil firms hiked rates with effect from midnight on Saturday.

 All rates in Rs/litre