Economy

Diesel price hike ruled out

Our Bureau New Delhi | Updated on January 21, 2011

Jaipal Reddy to seek revamp of duty structure





The common man can stop worrying that following the steep increase in petrol prices, diesel prices would also be raised.

The newly appointed Petroleum Minister, Mr S. Jaipal Reddy, has made it clear that at present there were no plans to raise prices of diesel.

In his first media interaction after assuming office, he said, “there is no proposal on the anvil for increasing prices of diesel.”

This could also be interpreted as Government's continued effort in not adding to inflation pressures.

Mr Reddy said that decision such as pricing of petroleum products will be taken by the Cabinet as their implications are huge.

He said that his Ministry will continue pressing the Finance Ministry for changes in duties on crude oil and petroleum products in order to protect the consumers from any further hike in retail prices.

In the Budget for 2010-11, 5 per cent import duty on crude oil was imposed and the duty on petrol and diesel was increased to 7.5 per cent from 2.5 per cent. Also, the excise duty on petrol and diesel was increased by Re 1 a litre taking it to Rs 14.35 and Rs 4.60 a litre, respectively.

Mr Reddy, who was earlier Minister of Urban Development, was given charge of Petroleum and Natural Gas Ministry in a reshuffle of the Manmohan Singh Government on Wednesday.

Speculation

With continued volatility in the global crude prices, and mounting pressure on the finances of the public sector oil marketing companies (OMCs) for selling diesel at a controlled price, there has been speculation that the Government could raise diesel prices.

However, due to forthcoming State elections the Government refrained from taking a decision for now.

The OMCs are expected to lose close to Rs 72,000 crore this fiscal due to selling petroleum products at a Government controlled price.

On what are the other areas which his Ministry would be focussing on during his tenure, the Minister said, stress will be on acquiring foreign resources and oil deposits overseas.

As regards the possible coming together of public and private sector entities for acquiring assets overseas, the Minister said “nothing is ruled out”.

Published on January 21, 2011

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