The Cabinet Committee on Political Affairs (CCAP) on Thursday decided to hike the diesel price by Rs 5 per litre while there is no increase in the prices of petrol, kerosene and LPG.The diesel price hike will be effective from Thursday midnight onwards.
CCPA, which is headed by Prime Minister Manmohan Singh and includes ministers from allies of the UPA alliance met on Thursday evening.
The Cabinet committee was originally scheduled to meet on Tuesday evening but the meeting was postponed. Oil minister S Jaipal Reddy had yesterday stated that a hike in diesel, LPG and kerosene prices was "unavoidable" as rise in crude oil prices and fall in rupee had led to jump in cost of raw material.
"As I said before, however painful and difficult the increase in price of oil product may be, increase is unavoidable. (To) what extent can consumer take (it) is another matter," he had stated. The double whammy of rising input cost (crude oil prices) and fall in value of rupee, which has made imports costlier, would mean that oil PSUs would end the fiscal with a huge Rs 1.88 lakh crore revenue loss on selling fuel below cost, he had stated.
"If it (price hike) is not taken up today, decisions may have to postpone by few days. However, I would like to tell the people (that) the increase in price is unavoidable. We will have to perform our unpleasant duty," Reddy had stated.
Diesel and cooking fuel rates have not been revised since June last year even as oil firms also sell deregulated petrol at a price which is almost Rs 6 a litre less than its cost. PSU oil firms are losing a record Rs 560 crore per day on the sale of regulated diesel and cooking fuels, and another Rs 16 crore a day on petrol.
They are losing about Rs 6 per litre on sale of petrol, a commodity which was freed from government control in June 2010 but whose rates haven't moved in tandem with the cost. They sell diesel at a loss of Rs 19.26 a litre, kerosene at Rs 34.34 per litre and domestic LPG at Rs 347 per 14.2-kg cylinder.
With PTI inputs
