New Delhi: Amid criticism of the diesel price hike, oil minister Dharmendra Pradhan has indicated that not increasing the diesel price may have hit investors sentiments. The challenge is to bring the economy back on track and we dont take any step which will send a negative signal to the investors-both domestic and international,” Mr Pradhan told a news channel. He also pointed out that diesel price for bulk consumption has been decreased.
The minister said that he welcomes diverse political views and diverse view points are good for a democracy. PSU oil companies had hiked diesel price by 50 paise a litre (excluding local taxes) on Saturday midnight. This was in continuation of the policy approved by UPA II to hike diesel prices every month by 40-50 paise till under-recovery on it completely ends.
However, opposition parties have criticised hike in diesel price. Tamil Nadu Chief Minister J. Jayalalithaa has said that the diesel price hike has disappointed people who wanted growth through change in regime.
Due to continuos hike in diesel prices in small doses, under-recovery on its sale has dipped to a new low of Rs 2.80 per litre. This means that diesel will be automatically deregulate in next few months, if new government continued with the policy.
The appreciation in Rupee against dollar due to improved sentiments on formation of a majority government has also decreased the under-recovery.
PSU oil marketing companies are also suffering a loss of Rs 32.87 a litre on kerosene and Rs 432.50 per cylinder on subsidised domestic cylinder. For the year 2014-15, the industry is expected to incur an under-recovery of around Rs 1,01,700 crore.
