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Hike diesel price by Rs 1.50: Oil cos

September 27, 2004 12:09 IST

State-run oil firms have sought a Rs 1.50 a litre increase in diesel prices to cover for the rising crude prices, but the government is unlikely to concede to their demand.

Petrol and diesel prices have remained unchanged for nearly two months now despite the rise in global crude and product prices.

"Our prices are short of import parity price. Oil companies are losing heavily and unless prices are increased, the situation will remain grim," a senior oil industry official said.

While petrol prices are almost at the import parity level, diesel is being sold at Rs 1.50 a litre below the import price level.

The government, is however, unlikely to heed to the oil companies' request with inflation again inching towards the eight per cent mark, and any rise in diesel prices at this juncture could fuel it.

"The petroleum and natural gas ministry had in July instructed us not to increase auto fuel prices. That order has not been withdrawn," the official said.

Government-owned oil firms had last increased the prices on July 31 by Rs 1.10 a litre for petrol and Rs 1.42 per litre for diesel.

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