Diesel price deregulation may happen by end of the year

Government may proceed towards Diesel price deregularisation by December this year if the current global price trend continues.

The government raises diesel prices by 50 paise per month and consumes revenue losses on the fuel around Rs 2.50 a litre. If this trend continues then the government will leave diesel pricing to market.

“If there are no international shocks in the oil sector, it is expected that in a year the government will be able to decontrol diesel fully,” Finance Minister Arun Jaitely said in the statement.

“The finance minister has set a target and spelled out broad road map for diesel deregulation and cutting LPG subsidy. The government will take appropriate action in this regard after factoring inflation and global oil prices, which is now on a decline,” a government source told Economic times.

Also the finance ministry is reportedly considering the reduction in number of subsidised gas cylinders to households to achieve the fiscal deficit of 4.1% by cutting fuel subsidies.

“With rising fuel subsidy, there is need to cap the subsidised cylinders at a more realistic level,” Jaitley said in the statement.

Currently government provides subsidy worth Rs 46,458 crore yearly on the cooking gas.

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