Diesel pricing partially freed from state-control

January 18, 2013 - 3:39:10 am

New Delhi: In another move, state-run transport fuel retailers have been allowed to revise diesel prices marginally and periodically without prior government consent.

In a cabinet meeting presided over by the Prime Minister Manmohan Singh, it was decided to partially decontrol pricing of diesel, giving the state-run oil marketing companies to “make small corrections in pricing from time-to-time”. In a related decision on India’s petroleum sector, it was also decided to raise the annual allocation of subsidised cooking gas from six to nine cylinders per household.

The government had earlier limited the number of subsidised cylinders to six per annum.

The decisions on diesel and cooking gas take immediate effect, officials said. 

“Oil marketing companies have been given the freedom to make small corrections from time-to-time,” Finance Minister P Chidambaram said, even as officials said the oil marketing companies could revise prices by an amount less than `1 per litre at one go.

The move comes nearly three years after petrol prices were similarly freed in June 2010 and coincided with the Congress Party’s three-day introspection meeting (Chintan Shivir) and  annual session which began in Jaipur yesterday.

But other political parties notably the main opposition Bharatiya Janata Party (BJP), Trinamool Congress and the Left parties, did not take kindly to the move saying, that the diesel prices had a bearing on the overall inflation of most commodities.

Reacting on the government’s decision BJP spokesman Prakash Javadekar termed it “atrocious” saying it would have a “cascading” effect on the prices of other commodities. “First they raised rail fares and now diesel. This is atrocious,” Javadekar said. 

“Diesel goes into the prices of all essential commodities. Whether it is food grains, vegetables, fruits, diesel becomes a component when price escalation takes place,” West Bengal Finance Minister Amit Mitra said. IANS