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Diesel shocker: Prices to be
deregulated in 6 months
New Delhi, November 20 The government had in January allowed oil companies to increase the price of diesel by up to 50 paisa a litre every month to gradually eliminate subsidies on the fuel. State-owned fuel retailers, who control 95 per cent of the petrol pump sales, sell diesel at government-fixed rates, which are way lower than the cost of production. “Under-recoveries had come down to Rs 2.50 because of monthly increases, but they soared to Rs 14 as the rupee depreciated sharply. Currently, under-recoveries on diesel are at about Rs 9.28 per litre,” Moily said. At current rates, it will take 19 months to wipe off all the losses on diesel sales, but the Petroleum Minister is pinning hopes on the rupee appreciating and international oil prices cooling down for reducing this time window to six months. Wiping out the under-recoveries would help in the deregulation of diesel. “We are already going in the direction of deregulating diesel prices. If the rupee appreciates against the dollar and international oil prices drop, we will be in a position to completely deregulate,” he said. Speaking at the conference earlier, Moily said India was the fourth largest consumer of energy in the world after China, US and Russia and is expected to become the third largest by 2025. India consumed 157.057 million tonnes of petroleum products in 2012-13. Ever-widening gap
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