(a) whether the Government is aware of public outcry over steep hike of diesel and petrol
prices in the country recently;
(b) if so, the reasons therefor and the steps taken/being taken by the Government to control
the rising prices of diesel and petrol;
(c) whether the Government proposes to restructure the subsidy rate of diesel and petrol giving
relief to public transport; and
(d) if so, the details thereof?
MINISTER OF STATE IN THE MINISTRY OF PETROLEUM AND NATURAL GAS (SMT.PANABAAKA LAKSHMI)
(a) to (d) In the light of the recommendations made by the Expert Group headed by
Dr. Kirit Parikh, the Government has made the price of Petrol market-determined
with effect from 26.06.2010. Since then, the public sector Oil Marketing Companies
(OMCs) take appropriate decision on the pricing of Petrol in line with the international
oil prices and market conditions. The OMCs have not only increased but also decreased the
Retail Selling Price (RSP) of Petrol in line with changes in the international prices.
The Government also took an ‘in principle’ decision on 25.6.2010 to make the price of diesel
market-determined, both at Refinery Gate and Retail Level. However, in order to insulate the
common man from the impact of rise in international oil prices and the domestic inflationary
conditions, the Government continues to modulate the RSP of Diesel. However, in order to reduce
under-recovery of the OMCs on sale of Diesel, the Government, on 17th January 2013, authorized
the OMCs to (a) increase the retail selling price of Diesel in the range of 40 paisa to 50 paisa
per litre per month (excluding VAT as applicable in different State/Union Territories) until
further orders; and (b) sell Diesel to all consumers taking bulk supplies directly from the
installations of the OMCs at the non-subsidized market determined price. Accordingly, Indian
Oil Corporation Limited (IOCL) has increased the price of Diesel for retail consumers by 0.45
paisa each per litre (excluding VAT) on 18th January, 2013 and 16th February, 2013 respectively.
OMCs have also implemented the decision to sell Diesel to bulk consumers at non-subsidized
market determined price. Even after the above decision, based on the Refinery Gate Price
effective 1.03.2013, the OMCs are incurring under-recovery of Rs. 11.26 per litre on sale
of Diesel to retail consumers.
The Government has received representations from various State Governments highlighting the
difficulties being faced by the State Transport Undertakings (STUs) on purchase of Diesel at
non-subsidized market determined price. It is within the domain of the State Governments to
provide appropriate relief to the STUs including through rationalization of State taxes.