Political pressure? Diesel unlikely to be hiked by Rs 5/litre

The oil ministry may no longer push for a steep Rs 5/litre diesel price hike sought earlier to foot the heavy import bill, reports CNBC-TV18.

Instead, the ministry is likely to seek a more politically feasible option one of Rs 3 to Rs 4 per litre price hike.

According to CNBC-TV18 sources, this is also on account of the rupee’s recent appreciation.

[caption id=“attachment_1101227” align=“alignright” width=“380”]  Veerappa Moily. PTI[/caption]

The ministry may also move cabinet to allow oil marketing cos to hike diesel prices by 0.90/litre every month from FY15 onwards, as against the current practice of a Rs 0.45-0.55 monthly price increase.

The under recovery on diesel is hovering around Rs 13/litre.

The UPA government in January had hoped to align diesel prices with market rates by the end of this fiscal via these monthly price adjustments of hike Rs 0.50/litre. But that has been foiled by the rupee’s free fall and rising crude prices. New Delhi.

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Under recoveries for FY14 are being estimated at Rs 1.67 Lakh cr.

The petroleum minister Veerappa Moily has promised to announce some measures on 16th September to help the financial health of the oil marketing companies. A fuel price hike prior to the 16th September announcement is highly unlikely.