Delaying the prospect of deregulation of the nation's most consumed fuel, losses on sale of diesel have risen to Rs 1.78 per litre after dipping to an all-time low of Rs 1.33 a litre in first half of August. Loss widened to Rs 1.78 per litre based on average international oil price and foreign exchange rate in the first half of the month.
Diesel prices have been hiked every month by up to 50 paise per litre to trim the losses and the rates so far have cumulatively risen by Rs 11.24 per litre in 18 installments since January 2013 when the previous UPA government had decided on small monthly hikes.
Back in January 2013, UPA government decided to raise diesel prices in small doses of 40-50 paise per litre every month till the losses, which are made good through government subsidy, are completely wiped out.
The monthly system of hike had trimmed losses to less than Rs 3 per litre in May last year before a fall in rupee value enlarged the losses on diesel sale to Rs 14.50 per litre in September 2013. Nevertheless, the losses have shrank rapidly since March as the prospect of a stable and decisive government under Prime Minister Narendra Modi helped the rupee gain against the dollar.
Meanwhile, the losses on diesel sales stood at Rs 4.41 a litre after Modi government came to power in May and further fell to Rs 1.62 a litre in the second half of June, only to double to Rs 3.40 in first fortnight of July. Post to which, the losses fell to Rs 2.49 in second half of last month.
Besides diesel, the oil firms are losing Rs 32.98 a litre on kerosene and Rs 447.87 on LPG and the under-recoveries for the financial year 2014-15 are projected to be Rs 91,665 crore against Rs 1,39,869 crore in 2013-14.
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