Indian government officials have said that prices of diesel in the country are expected to increase by 80 paise per liter starting from May 13, 2014. The prices will most likely be increased as the Election Commission did not accept the proposal of the oil ministry to shelve the decision of the cabinet of raising the rate of diesel in small monthly doses, as revenue losses on the fuel had decreased below Rs. 6 per liter about two months ago.
An official from the Election Commission said that the revenue loss is Rs. 6.80 per liter at the moment and the oil ministry has to make a decision. Moreover, sources from the government said that with proposed increase of 80 paise, revenue loss on diesel is expected to be approximately Rs. 5 per liter as of May 16, 2014.
The hike of 80 paise will also cover backlog. The Indian government had to defer the hike of politically sensitive fuel because of the polls under the garb of asking the Election Commission’s permission. Both industry and government officials said that the fuel price will increase steeply as the oil ministry did not allow oil companies to increase diesel prices in the previous two months.
In January 2013, the Cabinet gave a permission to state oil companies to increase diesel rates by 50 paise on a monthly basis until their revenue losses are completely gone.
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