The stage is set for another increase in the retail price of diesel. But the big question is: When and by how much?. Would it be tonight or in the next couple of days, and would it be by 90 paise a litre or 45 paise a litre?
In January the public sector oil marketing companies were allowed to increase the price of diesel in the range of 40 to 50 paise a litre (excluding VAT) each month till they are able to neutralise the loss suffered on selling the fuel below market price.
However, the comapanies have have not hiked diesel prices since March. The reason was obvious, the Karnataka elections. Any increase in auto and cooking fuel prices would have direct political implications.
The buzz was that the companies could take a decision on Thursday itself. However, the wait it seems, is till the Karnataka Chief Minister is elected, which may happen later today.
Some say the public sector oil marketing companies may increase prices to the extent that they are able to rationalise the hike not done in April. Therefore, the increase for April and May amounting to 90 paise a litre is a possibility.
The three public sector oil retailers — Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation — had last increased the retail selling price of diesel by 45 paise a litre (excluding VAT) on March 22-23 in line with the flexibility given to them by the Government to revise diesel prices.
Prior to March the retail price of diesel was revised upward by 45 paise on February 16. When the next hike happens, it will be the fourth such increase since January, following the Government decision to allow the oil marketing companies to stagger the increase of diesel prices in small doses in order to reduce under-recovery and at the same time restrict the impact on consumers.
The desired increase in retail price of diesel is Rs 4.28 a litre effective May 1.