With the Budget session of Parliament going into a recess, oil marketing companies (OMCs) have decided on a 45p a litre rise in diesel prices from midnight.
This would be the third increase after the government allowed a phased decontrol of diesel prices on January 17. Retail prices were earlier revised upward on February 16, by 45p a litre. After the latest rise, the OMCs underrecovery on diesel would be Rs 8.19 a litre, an Indian Oil Corporation statement said. The other two OMCs, both also government-owned, are Bharat Petroleum and Hindustan Petroleum.
The government was allowing a monthly cycle for raising the price (of 45-50p a litre at a time) and one was due on March 15 or 17. It was believed the OMCs were waiting for the Budget session to get over. After the rise, the diesel price in this city will be Rs 48.67 a litre, as against Rs 48.16 now.
The OMCs also suffer under-recovery on sale of kerosene, at Rs 33.43 a litre and domestic cooking gas (LPG) of Rs 439 a cylinder. The current year estimate of under-recovery on sale of these three products for IOC is Rs 86,400 crore; for the industry, Rs 163,000 crore. The government had decided to allow a 45-50p a month rise till all the loss of OMCs on this account were ended.
In a written reply to the Lok Sabha on Friday, petroleum minister M Veerappa Moily said the OMCs had issued 5.3 million more LPG connections during the October 2012 to February 2013 period. The government expects to issue another 431,856 new connections by April 1.