Diesel price hike? Not before vice-prez polls, say sources

Diesel prices are highly subsidised in India because of its extensive use in commercial transport as well as the farm sector; any increase in diesel price is likely to bring in political disaffection for the government.

Under-recoveries on diesel is expected to increase from Rs 81,000 crore in 2011-12 to over Rs 1 lakh crore in 2012-13. Presently, under-recovery on diesel is Rs 12.53 per litre. Under-recoveries are the difference between the purchase price of crude and the price at which state-run oil marketing companies sell it for.

Meanwhile, sources also say that the Cabinet Committee on Economic Affairs will take up the proposal for raising diesel and even liquefied petroleum gas prices

The Petroleum Ministry is planning to push for a diesel price hike before the monsoon session of Parliament starts on August 8. It is also learnt that defence minister A.K Anthony will head an Empowered Group of Ministers (EGoM) on gas allocation.

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