The government could free diesel prices once headline inflation eases to 6%, C Rangarajan, the prime minister's top economic adviser said on Monday.
The government expects headline inflation to ease to 7% by March, from 8.23% in January. Raising diesel prices is a political hot potato in India as it accounts for a third of the country's fuel demand. Deregulation of petrol prices in June sparked off political protests against the Congress-led coalition government. Diesel and gasoline have a weighting of 4.67% and 1.09%, respectively, in the wholesale price index (WPI), India's main inflation measure, and raising fuel prices has a knock-on effect as farmers and manufacturers pass costs along.Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
