New Delhi, Sept 13: The government today decided to hike diesel prices by Rs 5 per litre effective midnight tonight, but left petrol, kerosene and LPG rates untouched.
The Cabinet Committee on Political Affairs, headed by Prime Minister Manmohan Singh, this evening decided to raise diesel prices by Rs 5 per litre, excluding VAT (value-added tax).
It also decided to restrict supply of subsidised cooking gas to six cylinders per household in a year.
Diesel in Delhi costs Rs 41.32 a litre and after this hike, it will cost Rs 46.95, after considering 12.5 per cent VAT on the hike.
Petrol needed a hike of Rs 6 per litre but the government offset that by reducing excise duty by Rs 5.50 per litre from existing rate of Rs 14.78 per litre.
Following will be the hike in diesel rates in different cities:
Delhi Rs 41.32 Rs 46.32
Mumbai Rs 46.25 Rs 51.25
Ambala Rs 39.90 Rs 44.90
Bhopal Rs 45.75 Rs 50.75
Chandigarh Rs 41.94 Rs 46.94
Jaipur Rs 43.22 Rs 48.22
Lucknow Rs 44.05 Rs 49.05
Following is the official press note on today's diesel price hike:
The Cabinet Committee on Political Affairs (CCPA) met under the chairmanship of the Prime Minister to consider the disturbing situation arising out of projected massive under-recoveries of Rs. 1,87,127 crore for the financial year 2012-13 in the wake of high international crude oil prices and sharp depreciation of Indian Rupee against US Dollar.
The uncompensated under-recovery causes loss to the Public Sector Oil Marketing Companies (OMCs).
The CCPA took the following decisions to be implemented with effect from the midnight of 13/14 September 2012:
a) Increase in price of Diesel by Rs. 5 per litre excluding VAT. Out of this, Rs. 1.50 per litre is on account of increase in Excise Duty.
The balance increase of Rs. 3.50 per litre will reduce the under-recovery of OMCs by about Rs. 15,000 crore for the remaining part of the current financial year.
The under-recovery on sale of Diesel during 2012-13, even after this price hike, is estimated to be above Rs. 1,03,000 crore .
The revised RSP of Diesel in Delhi will be approximately Rs 47 per litre. Further, branded Diesel will be sold at the market rate.
b) No increase in the price of Petrol, although the current under-recovery on Petrol is about Rs 6 per litre. The consequent loss to the OMCs will be offset through reduction in Excise Duty on Petrol by Rs 5.30 per litre.
c) Restrict the supply of subsidized LPG cylinders to each consumer to 6 cylinders (of 14.2 Kg) per annum. This will help in reducing the under-recovery by about Rs. 5,300 crore for the remaining part of the financial year.
The under-recovery on sale of Domestic LPG during 2012-13, even after this measure, is estimated to be above Rs. 32,000 crore.
Any number of cylinders will be available over and above the cap of 6 cylinders at market rate.
The number of subsidized LPG cylinders available to each consumer in the remaining part of the current financial year will be 3 cylinders.
While subsidized cylinders will continue to be available at Rs. 399 per cylinder (at Delhi), the market rate of LPG cylinders at non subsidized rates will be notified by the OMCs on monthly basis.
