Diesel prices to be market driven, says PMEAC chairman Rangarajan

 

Chennai:

In a bid to cut down on subsidies, the Union government is considering to make the diesel prices market driven instead of raising it to 50 paise every month.

This was disclosed by Prime Minister’s Economic Advisory Council (PMEAC) Chairman C Rangarajan on the sidelines of Dr Rajah Chelliah Memorial Lecture conducted by Madras School of Economics.

Talking to reporters, Rangarajan said that diesel prices in the course of next few months will get regularized and will be market driven.

The government set price for diesel is about Rs 10 per litre below international rates and currently the price is increased by about 50 paise every month to align them with market levels.

“The 50 paise rise in diesel prices was slated to last till March next year. But suddenly due to the depreciation of rupee the adjustment has now become higher. As such in principle it was decided that the diesel prices should be market related,” he said.

“Now instead of 50 paise we can adjust the quantum a little more. But in principle it has been agreed to raise the diesel prices,” he said.

Interestingly, his comments come in the wake of Kirit Parikh Committee recommending an immediate hike of Rs 5 in diesel price, Rs 250 per cylinder in domestic cooking gas price and Rs 4 per litre in kerosene oil.