One of the much needed decisions has been made, the government has finally deregulated diesel prices which has resulted in a price cut of Rs. 3.37 / litre.
With this deregulation, retail rates for diesel will now reflect the international movement in oil prices. If this was done earlier, the diesel price would have been dropped before. However, the decision was held till the assembly polls were taking place. Also, there will be no fiscal deficit on the country due to diesel price subsidies and the customer will pay for the fuel as per the international rates.
Starting from January 2013, the diesel prices were increasing up Rs. 0.50 every month and the total hike till date was at Rs. 11.81 / litre. The diesel price reduction has come in after 5 years and is now expected to ease of inflation as well. The government was over-recovering on per litre diesel sold for almost 2 months and this had help the oil companies recover their previous losses.
Although diesel rates are now subject to change as per the international crude prices, the customer at the moment will be happy with the price reduction.