India hikes retail prices of diesel, kerosene and LPG

The empowered group of ministers (EGoM) headed by finance minister Pranab Mukherjee today approved a price hike for diesel, LPG and kerosene. Diesel prices will go up by Rs3 per litre and kerosene by Rs2 per litre while the price of LPG would go up by Rs50 per cylinder.

The revision in prices is effective from midnight tonight, petroleum minister S Jaipal Reddy said after the meeting.

The EGoM also decided reduce customs duty on diesel from 7.5 per cent to 2.5 per cent and to abolish the 5 per cent customs duty on crude oil.

The hike in the fuel prices would raise the revenues of state-run oil marketing companies by Rs21,000 crore and reduce the government's subsidy bill to that extent, Reddy said.

OMCs, which buy crude oil at market rates and sell diesel, kerosene and liquefied petroleum gas (LPG) at government-subsidised prices, lose crores of rupees each day.

State-run oil firms, including Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation, currently lose Rs15 per litre on diesel, Rs27 per litre on kerosene and Rs381 per cylinder of cooking gas.