Oil Companies in India are running a huge deficit as both petrol, diesel, cooking gas and Kerosene prices are heavily subsidized. The Cabinet took cognizance of this huge deficit and allowed the oil companies to synchronize their prices with the price of oil in the world market. However, they were keen to avoid the uproar that was likely to be created in the country if the diesel prices are raised at one go. They authorized the companies run by the state to increase the diesel prices every month in small sums. The procedure would continue till all deficits are finished.
Keeping this instruction in mind the state run oil companies are slashing or raising prices based on the prices of crude in the world market. They cut down the price of petrol in March by Rs.2-40 Per Litre. However, the prices of diesel need to be raised because diesel is heavily subsidized. Authorized by the cabinet, they planned to raise the price of diesel every month by a small amount. The price rise in January was 0.45 Paise and in February also it was 0.45 Paise; the next price rise according to the plan was expected to be on the 16th March; however, the state oil companies resisted from increasing the price because there was a session of Parliament going on and they did not want to be the cause of disruption. They waited till the Parliament was adjourned and then announced their third increase on 23rd March (Saturday). The diesel prices from 23rd March are raised by a 45Paise PL. The price increase does not include VAT; however, the price diesel is not uniform and differs from state to state. The increase will be:
- Delhi – 51Paise
- Mumbai 57Paise
- Kolkata – 53Paise
- Chennai – 55Paise
??Oil companies say that their deficit has come down from Rs 11.2 pl to Rs.8.19PL .Along with this loss the oil companies are also suffering loss of Rupees 33.43 PL on Kerosene sold to subsidized sector and a loss of Rupees 439/- on gas cylinder the loss is Rupees 439/-. The revenue loss under these two heads is substantial.