Veerappa Moily in New Delhi on Tuesday. Picture by Ramakant Kushwaha
New Delhi, Sept. 24: The government today ruled out an immediate hike in diesel and cooking gas prices even as it launched a conservation campaign to save $5 billion in fuel import bill this fiscal by asking people to opt for sharing of cars, travelling by buses and cycling as well as staggered working hours.
“We have to take a decision objectively and in the interest of the consumer... As of today, there is no proposal to increase prices of diesel except for what the cabinet had authorised in January,” petroleum minister Veerappa Moily told reporters here.
The cabinet had allowed state-owned oil firms to hike diesel rates by 40-50 paise a litre monthly since January this year.
With the rupee depreciating sharply this fiscal, the difference between the cost of producing fuel and the retail price has widened.
Diesel is currently being sold at a loss of Rs 14.50 per litre. Besides, state-owned oil firms are losing Rs 36.83 per litre on kerosene sold through ration shops and Rs 470.38 per 14.2-kg cooking gas cylinder.
The government appears to be wary of the political impact the increase in prices will have just ahead of Assembly elections in four crucial states, including Delhi, Rajasthan and Madhya Pradesh.
Diesel accounts for more than 40 per cent of fuel demand, bulk of which is used by trucks, farmers and industry.
Battling a record current account deficit that is a result of mounting oil import bill, Moily is hoping the fuel conservation campaign to help taper demand, thereby cutting oil import bill by $5 billion.
Moily wants staggered office timings for government offices that will help decongest road traffic and requested public sector staff to use buses for commuting at least once a week. Safe driving and using public transport are some other Moily’s tips to save fuel.
“We need to conserve fuel or face tough choices such as price hike or quantitative restrictions,” Moily said.