Is diesel de-control on cards?

The petroleum ministry has proposed to free up the prices in its cabinet note, which is a major step towards complete de-regulation of diesel prices. However, the note is yet to be vetted by the petroleum minister Dharmendra Pradhan.So the big question is will the minister bite the bullet? The petroleum minister has always said that this is the government for the poor man. The ministry has prepared a cabinet note for de-regulation proposing that every month there should be a revision in diesel prices and at best it can be on a fortnightly basis.

Also read: No more subsidies; diesel prices to be mkt-driven: Mayaram So, it is not going to be every day or every week that you are going to see diesel prices being revised. That is also the case as far as bulk diesel goes, which was de-regulated almost two years back. According to sources, the note has presented several options for subsidy sharing by the upstream companies. One is to pick up the Kirit Parikh recommendations, which is slab wise. Second is to link it with production; higher the production, lower the subsidy compensation by the upstream companies. Third is that companies be allowed to retain about USD 60 a barrel, as opposed to the current USD 56 a barrel. However, what is now on the table is that the government, the oil ministry is quite keen to also link it with royalties; Oil and Natural Gas Corporation (ONGC), Oil India, etc pay very hefty royalties to the state governments. So the thinking now is that the net realisations for the upstream companies should also factor that in.