Asia Bizz: Once the Indian finance bill for the current financial year has been passed the retail prices of subsidized fuel, including diesel, will be raised. The Parliament is yet to pass the finance bill of the current year after which there are chances that the prices of diesel might also be increased.

The finance bill is expected to be considered by the Parliament on May 7, 2012 and is expected to be approved in a couple of days. A source, who did not wish to be named due to the sensitivity of the matter, told First Post, “The government’s credibility on fiscal consolidation is at stake. After crude prices remaining over $120 a barrel, hike in oil (fuel) prices is certain,”.

Even Indian finance minister Pranab Mukherjee is determined to raise prices of fuel as soon as possible in order to tackle a rising subsidy burden as well as large deficits. But the move might not be good for the weak coalition government, which has already been fired for high inflation.

The last time prices of diesel were raised was in July 2011, but the government has not fulfilled its promise to liberalize the market fully. The prices of diesel were also expected to rise earlier this year.