April 26, 2024 16:15 (IST)
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Govt decides to deregulate diesel, price slashed by Rs. 3.37 per litre
New Delhi, Oct 18 (IBNS): The Union Cabinet Committee of Economic Affairs, chaired by Prime Minister Narendra Modi on Saturday decided on making some major reforms in the oil and gas sector, effectively deregulating diesel prices.
The committee approved the issues relating to the under-recovery on sale of diesel and its present status.
Instructions have been issued to make the price of diesel market determined with effect from Saturday midnight.
The prices of diesel will be market determined at both retail and refinery gate level for all consumers thereafter.
As a result, the price of diesel would be slashed by Rs 3.37 per litre in Delhi with effect from midnight.
Based on an earlier decision of the Cabinet Committee on Political Affairs (CCPA), instructions were issued to the Public Sector Oil Marketing Companies (OMCs) allowing them to 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 States/Union Territories) till further orders.
This will facilitate greater competition in the Auto Fuels Retail segment and enhanced efficiency in service delivery of the oil companies.
The Cabinet Committee of Economic Affairs, also approved the new domestic gas pricing policy.
As per the formulation approved by the CCEA on Saturday, upward revision in gas prices will be approximately 75% less as compared to the price arrived at using Rangarajan formula.
Approximately 80% of the additional revenue due to revision in gas price will go to the Government companies.
The government will get additional revenue of approximately Rs. 3800 crore per annum on account of higher royalty, higher profit petroleum and higher taxes.
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