Oil Minister M Veerappa Moily said on Friday that diesel prices will be hiked by 40-50 paise per litre every month till losses on the nation’s most used fuel are completely wiped out. Diesel is currently sold at a loss of over Rs. 10.80 per litre. On January 17, oil firms hiked diesel price by 45 paise. After including local VAT, the increase in Delhi came to 50 paisa. The diesel now costs Rs. 47.65 a litre in the capital.  

Moreover, the decision for retail price hike was coupled with a move to charge bulk consumers like defence, railways and state transport undertakings market price which is almost Rs. 10 a litre more than retail selling rate, to save an estimated Rs. 12,907 crore in annual subsidy.  

In fact, Mr. Moily added that instead of buses being asked to refuel at petrol pumps, the states should reduce high local sales tax or VAT on diesel to cut prices.

(AW:Samrat Biswas)