The price of diesel in Delhi will be hiked by 57 paise, including tax, to Rs 53.67 per litre, while it will cost Rs 60.70 a litre in Mumbai as against 60.08 currently.
Petrol prices were last revised on November 1, when it was cut by Rs 1.15 a litre. It costs Rs 71.02 a litre in Delhi currently.
A government panel had recommended an increase of Rs 5 a litre during a recommendation presented in October. The diesel price hike could cut the government's fuel subsidy bill by as much as Rs 16,000 crore from November 1 to the end of the current fiscal year on March 31, 2014, according to Reuters. Diesel accounts for over 40 percent of refined fuel use in the country.
The government allowed oil companies in January to raise diesel prices in small doses every month to wipe out mounting losses. While most of the shortfall on diesel sales should have been wiped out, losses mounted to Rs 14.50 per litre in July-August as the rupee fell about 25 percent from April levels. The recent firming up of the rupee against the dollar and the monthly price increases have trimmed these losses to Rs 9.99 a litre. Diesel rates have risen by a cumulative Rs 6.62 this year.
(With additional inputs from PTI)
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