Expecting oil prices to remain under pressure, Fitch Ratings said deregulation of diesel prices in October will help in lowering the under-recoveries (which is nothing but international petroleum prices minus the subsidised retail rates).
The Indian government's 18 October decision to deregulate diesel prices will have a positive effect on the national oil marketing companies that are the principal retailers of petroleum products, says Fitch Ratings.
All sectoral indices barring IT ended higher today. BSE Auto, Capital Goods, Oil & Gas, Bank, Metal, Power and Healthcare indices gained 1-2 percent.
India regulates diesel prices to protect the poor and curb inflation and deregulation could bring the return of private firms such as Reliance Industries and Essar Oil to retail sales.
In an interview with CNBC-TV18, Lalit Kumar Gupta, CEO of Essar Oil, spoke about a host of issues, including the possibility of complete diesel deregulation in 2014, the company‘s refining margins and its expansion plans.