The Cabinet Committee on Political Affairs has chosen to raise the price of diesel by Rs 5. The price of petrol, being unregulated, remains the same. The price of diesel is thus now hovering around the Rs 50/ litre mark.
The price of LPG and kerosene have also been left untouched, but the number of LPG cylinders is now capped at six per family. The current losses of state-run oil companies is currently Rs 550 crore per day, with Rs 17 being lost on every litre of diesel sold at current prices.
The diesel price hike hasn't come into effect so far because of the fear of inflation that a diesel price hike will precipitate. However, this will restore a little balance to the car market, which has been suffering from the effects of the dieselisation of the economy.
