Reddy rules out further hike in diesel, gas prices

Facing enormous political fury after recently raising diesel prices and putting a cap on subsidised cooking gas, the government today ruled out any further increase in diesel and gas prices at least during this fiscal year.

''I am not so courageous,'' said petroleum and natural gas minister S Jaipal Reddy at the Economic Editors' Conference in New Delhi.

This is despite the fact that the three state-owned oil marketing companies are facing a huge revenue loss through selling diesel, LPG (cooking gas) and kerosene well below the cost of production.

The government last month hiked the price of diesel by Rs5 per litre (or Rs5.62 taking taxes into account) and restricted the supply of subsidised LPG to six cylinders a year per household, leading to an uproar from opposition parties.

The three oil retailers lose Rs11.65 per litre on diesel, Rs33.93 on kerosene sold through the public distribution system, and Rs468.50 per 14.2 kg cylinder of LPG.

''Even after these recent increases, the under-recoveries (or revenue loss) this financial year will be higher than they were last year,'' Reddy said, adding that oil firms are projected to lose Rs167,415 crore this fiscal as compared to Rs138,541 crore revenue loss in 2011-12.