Oil Minister Veerappa Moily informed reporters that his ministry was yet to process and finalise its view on
a proposal to raise fuel prices, on the lines of the recommendation of Kelkar committee.
Raising diesel prices is essential in order to reduce the under-recovery of the three public sector oil marketing companies – IOC, BPCL and HPCL. These firms sell diesel at a loss of Rs 10.16 per litre and Rs 32.17 for every litre of kerosene. Subsidised domestic cooking gas is sold at a loss of Rs 490.50 for each refill.
A committee set up under the former economic affairs secretary Vijay Kelkar called for de-regulation and gradual increase in diesel and kerosene prices respectively.
The panel was appointed by the Finance Ministry to draw a roadmap for fiscal consolidation. Earlier, a panel headed by former Planning Commission member Kirit Parikh suggested de-regulation of fuel prices. After the recommendations; petrol pricing was freed from Government control in June 2011.
Currently, diesel in Delhi costs Rs 47.15 a litre after the last revision of Rs 5.63 for every litre on September 14. Subsidised kerosene costs Rs 14.79 in the Capital and its rates have not been revised since June 2011.
Moily said his Ministry was processing a proposal to increasing the cap on supply of subsidised domestic cooking gas cylinders to nine per household in a year from current limit of six.