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Diesel price increased 40 per cent

Diesel prices have been increased by almost 40 per cent from midnight tonight.

Announcing this in New Delhi, Oil Co-ordination Committee Executive Director M S Ramachandran said that though the step was long overdue, it could not be taken for various reasons.

The price has now been increased to keep up with the international price of diesel.

The upward revision has taken into account the prevailing rupee-dollar exchange rate, he added.

The last upward revision was on April 19-20 this year when the price of diesel was increased marginally from Rs 6.62 ex-storage per litre to Rs 6.88.

Today's could be the steepest increase in recent years since the freight-on-board price for Gulf crude diesel, which was ruling at $97.38 per tonne in April, has gone up to $162.10, Ramachandran said.

The actual pricing in different markets will depend on sales tax and local levies. The increase in the retail selling price in Delhi will be Rs 3.56 per litre, Rs 3.68 in Calcutta, Rs 4.31 in Bombay and Rs 3.97 in Madras.

Thus, the commodity will be priced least in Delhi at Rs.13.91 a litre, while it will be most expensive in Bombay at Rs 16.54 a litre.

Following are the diesel prices for the four metros.

Metro      Current price      New price
Delhi       Rs 10.35           Rs 13.91
Calcutta    Rs 10.52           Rs 14.20
Bombay      Rs 12.23           Rs 16.54  
Madras      Rs 11.27           Rs 15.24 

Despite this increase, the oil pool deficit will not be wiped out, but it will definitely be reduced to Rs 34 billion from the present level of Rs 52 billion.

He said that if the price were not increased now, the deficit would have touched Rs 100 billion by March 31, 2000.

Ramachandran said the OCC had only a few options to curb the oil pool deficit. These included reducing the subsidy on kerosene and liquefied petroleum gas. In September the government subsidised kerosene to the tune of Rs 5.55 per litre and LPG by Rs 157 per cylinder. Kerosene and LPG together account for nearly Rs 120 billion in annual subsidies.

He clarified that the OCC had taken the decision only after getting the nod from the government.

Ramachandran further disclosed that since the introduction of price parity of domestic crude with international crude, the OCC had revised the price of diesel on nine occasions, including this one, but on six of those occasions the price was reduced.

He also said that going by the current trend, it was felt that no more imports of diesel would be required after October this year.

UNI

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