Govt likely to call off...

The Cabinet had in January last year decided that diesel prices should be raised by 40-50 paise a litre every month until losses on the fuel were completely wiped out.

However, there was no evidence of the ` 6 threshold when diesel prices were raised on May 12 and June 1 last year, when the under-recovery or loss on the fuel slipped to ` 3.81 and ` 4.87 per litre, respectively. According to sources, the ministry had planned to approach the Cabinet in February to halt further diesel price increases but couldn’t do so before last month’s announcement of the general elections.

Interestingly, oil companies skipped raising diesel prices in April last year, when assembly elections were held in Karnataka. However, they made up by hiking diesel prices by 90 paise in the following month.

Indian Oil Corp, the country’s largest oil firm, recently said that it had been implementing the government’s order to “increase the retail selling price of diesel within a small range every month until further orders.”

“The under-recovery on diesel is currently ` 5.93 a litre, which is below ` 6 per litre, which is the interim subsidy cap recommended by the expert group of Kirit Parikh. Hence, the issue of monthly price increase is under consideration of the government and the matter has been referred to the Election Commission. A decision regarding revision of diesel retail price shall therefore be taken on receipt of further advice by the government in this context,” a statement by the company had said.