New Delhi: Petroleum minister M. Veerappa Moily said on Wednesday that diesel prices will be deregulated in six months with gradual price increases.
Moily said that he saw no hurdles in assembly elections in few states and ensuing general elections to the monthly revisions in rates.
“In six months, diesel sector will be deregulated,” said the minister, without envisaging a steep one-time hike.
In January, the Cabinet had allowed oil companies to increase diesel prices by 40 to 50 paise every month until under-recovery on its sale is fully eliminated.
“We are already going in that direction (of deregulating diesel prices).
(If) rupee appreciates (against the dollar) and international oil prices drop, we will be in a position to completely deregulate,” said Moily.
He said the monthly increases in rates will continue as planned and there was no plan for a one-time steep hike of Rs 3 or 4 per litre to bridge the gap. “Under-recoveries (losses on diesel sales) had come down to Rs 2.50 due to monthly increases but they soared to Rs 14 as rupee fell sharply. Currently, under-recoveries on diesel are at about Rs 9.28 per litre,” Moily said.
While world energy demand is projected to grow at a rate of 1-2 per cent per annum in the next 20-30 years, he said India’s energy demand is poised to grow between 6.5 and 8 per cent by 2030.
“Currently, India is the fourth largest consumer of energy in the world after China, the US and Russia. It is expected to become the third largest consumer of energy by 2025.
The consumption of petroleum products in 2012-13 was about 157.057 MMTPA. The per capita energy consumption in India is about 26 per cent of world average per capita energy consumption,” said Mr Moily.
