Diesel Prices to be Freed from Government Control: Manmohan Singh

Strategic Insights -

Prime Minister Manmohan Singh today announced plans to free diesel prices from government control, as part of a series of "much-needed reforms". The decision follows the decontrol of petrol prices on June 25, which resulted in a Rs3.50 per liter increase in Delhi and a Rs2 per liter rise in diesel prices. While diesel prices are expected to rise by another Rs1.50 if freed from control, Singh emphasized that the prices of domestic cooking gas (LPG) and kerosene will continue to be regulated by the government. The government has also increased domestic LPG prices by Rs35 per cylinder and kerosene rates by Rs3 per liter, with both being sold below cost.

Key Takeaways:

  • The government plans to free diesel prices from control, with prices expected to rise by Rs1.50 per liter.
  • Petrol prices were decontrolled on June 25, resulting in a Rs3.50 per liter increase in Delhi.
  • Domestic LPG prices were increased by Rs35 per cylinder and kerosene rates by Rs3 per liter.
  • LPG and kerosene will continue to be sold below cost, with LPG being subsidized by Rs226.90 per 14.2 kg cylinder.
  • The government took care to minimize the impact on the poorer sections by continuing to subsidize kerosene and LPG.
  • The decision was not taken due to pressure from any country, but rather to ensure sound financial management of the economy.
  • The subsidies for petroleum products have reached unsustainable levels, according to the Prime Minister.

Statistics:

  • Diesel prices are expected to rise by Rs1.50 per liter if freed from government control.
  • Petrol prices increased by Rs3.50 per liter in Delhi.
  • Domestic LPG prices increased by Rs35 per cylinder.
  • Kerosene rates rose by Rs3 per liter.
  • LPG and kerosene prices are being sold below cost.
  • LPG is being subsidized by Rs226.90 per 14.2 kg cylinder.
  • Kerosene is being sold at Rs15.07 per liter below cost.

Sources:

  • "Prime Minister Manmohan Singh on Fuel Price Hike". Domain-b.com, 2010, [www.domain-b.com/corporateboard/industryzone/indiaprime_minister_mohan_man_mohan_singh/](http://www.domain-b.com/corporateboard/industryzone/indiaprime_minister_mohan_man_mohan_singh/)