Deregulate Diesel Prices At The Earliest: Rajan

Rates were last raised on August 31 after which losses have dipped. Rates have cumulatively risen by 11.81 per litre in 19 instalments since January 2013. Oil Ministry officials said once the under-recovery is eliminated, a proposal would be put to the Cabinet Committee on Political Affairs for deregulation of diesel prices as was done for petrol.

Deregulation would empower state-owned oil firms to change rates in tandem with cost like they do for petrol. Dr. Rajan admitted that there are significant geopolitical risks with Ukraine and the Middle East in turmoil leading analysts to worry that the current low oil prices may be a temporary phenomenon.

Last year, India imported more than 118 million tonnes of crude worth $144 billion, making it the largest contributor to a historic high current account deficit which had shot up to over 6 percent in the middle of last fiscal forcing the government to unleash some unconventional measures like curbs on gold imports.

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