The empowered group of ministers (EGoM) today decided to deregulate petrol and diesel prices. This means that petrol and diesel prices have been de-controlled and will be linked to the market price of crude.
However, for now, diesel prices have only been increased by Rs 2. The hike in petrol prices would be close to Rs 3.5.
S Sundareshan, the Petroleum secretary, said that the under recoveries on the part of oil marketing companies for petrol would have been 7,000 cr. and for diesel 23,000 cr. for the whole year if their prices would not have been decontrolled.
Sundareshan said that for an average car user the increase in petrol price would add a burden of only Rs 150 per month while for a motorcycle user the burden would be Rs 30-35 per month.
Kerosene prices, untouched since 2002, have been hiked by Rs 3 while the cost of an LPG cylinder would go up by Rs 35 per cylinder. The government currently gives a subsidy of Rs 262 per cylinder.
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