Diesel to cost Rs5 more; LPG restricted to 6 cylinders a year
13 September 2012
The Cabinet Committee on Political Affairs (CCPA) at its meeting today decided to increase the retail price of diesel by Rs5 per litre and restrict the supply of subsidised domestic cooking gas (LPG) to six cylinders per year, effective Friday.
The CCPA also allowed branded diesel to be sold at the market rate, as decided by oil marketing companies. Additional cylinders over and above the 6 cylinder per year cap will also be made available at market rate.
The CCPA meeting chaired by Prime Minister Manmohan Singh, however, decided against any hike in the prices of PDS kerosene, LPG and petrol.
Of the Rs5 per litre increase in the price of diesel, which excludes VAT, Rs3.50 will go to the oil marketing companies on account of under-recoveries while Rs1.50 will be additional excise duty.
The Rs3.50 per litre increase will reduce the under-recovery of OMCs by about Rs15,000 crore for the remaining part of the current financial year, thereby reducing the government's subsidy burden, an official release said.
This will still leave Rs1,03,000 crore of under-recoveries on the sale of diesel during 2012-13, it added.