Diesel Prices Likely to go up by Rs 10 in 2013

After increasing the diesel prices by over Rs 5 three months back, Oil ministry is likely to increase diesel prices by Rs 10 in next 10 month's time. As per the reports available around, the ministry of oil is aiming a steady rise in the prices by Rs 1 per litre a month, for the next 10 months. From customer's point of view, it might actually affect their budget, but Society of Indian Automobile Manufacturers (SIAM) believes that the hike in diesel prices will be in favour of the industry and economy of India.

After the recommendations proposed  by Kelkar panel to the oil ministry and an indication by Prime Minister Manmohan Singh  and the petroleum ministry to hike fuel prices, SIAM an industry body for auto manufacturers in India has welcomed the move. Commenting on the development SIAM says “Though the proposed price hike of diesel is quite steep but SIAM would really support the rationalizing of prize hike and also insists that the rationalizing has to be done in a manner which shouldn’t affect the consumers adversely. It may affect the sales of vehicles for a short term but the elimination of prize distortion will help the industry and economy in the long run”.

State-owned oil companies are currently bearing a loss of Rs 9.28 per litre and if the hike takes place, it would help them cover the losses. Speaking on the same Prime Minister Manmohan Singh said that subsidies given on energy product should be limited, with a phased adjustment of prices. "Unfortunately, energy is under-priced in our country. Our coal, petroleum products, and natural gas are priced well below international prices. This also means that electricity is effectively under-priced," he said.

"Immediate adjustment of prices to close the gap is not feasible, I realise this, but some phased price adjustment is necessary," Prime Minister added.