New Delhi: The Modi government has decided to deregulate the price of diesel, Finance Minister Arun Jaitley announced on Saturday.
Making the announcement following a cabinet meeting on Saturday evening, Union Finance Minister Arun Jaitley said, “Over the last 5 years, the (diesel) prices have increased (by) almost 50 paise every month because there is a reduction in the international crude prices while we are linking it to the market price. The price on Saturday would stand reduced.”
State-owned fuel retailers made their maiden profit on diesel in second half of September with a modest over-recovery of 35 paise. In Delhi, the price of diesel is expected to go down by Rs. 3.37 from midnight.
Deregulation means the prices of diesel will move as per market flow – just like petrol. It would also ease the government’s huge subsidy burden.
This was the ideal time for deregulation as the global oil prices have been falling and the retail sale of diesel has been bringing in profits for six consecutive weeks. This swelled to Rs 1.90 in first half of October and stands at Rs.3.56 per litre now.
Recently, Raghuram Rajan, Governor of the Reserve Bank of India, had advised the Narendra Modi government to seize the moment and deregulate diesel prices.Â