Actual reduction in price will be more after taking into account local VAT.
The decision to decrease VAT on diesel from 20 per cent to 12.5 per cent was taken at a cabinet meeting today presided over by Chief Minister Sheila Dikshit.
The company said despite the recession in global markets, it has invested over Euro 3 billion (Rs 20,000 crore) in 2009 particularly in developing technologies for the low- priced vehicles to improve fuel efficiency.
Petrol price was on Monday hiked by Rs 2.19 a litre and diesel by 98 paise per litre.
This is the second increase in rates of petrol this month while in case of diesel it wipes away a part of the hike effected earlier this month
Ahead of assembly polls in states like Rajasthan and Delhi, Oil Minister M Veerappa Moily on Tuesday said his ministry is mulling withdrawing the order that made it mandatory for state public transport utilities to buy diesel at market price.
The fall in international oil prices had resulted in six consecutive reduction in petrol prices since August and two in diesel in the last one month and there was possibility of another round of cuts this weekend.
This is the third reduction in rates this month
With the fight now having been taken to the seizure of nuclear plants, it is one more warning to Europe that this prolonged war could end up with disastrous consequences, observes Rashme Sehgal
India is the second largest buyer of Iranian crude, after China.
Major carmakers like Maruti Suzuki and Honda did not have diesel technology and it is in the last 3-4 years that they invested in diesel vehicles owing to shift in demand towards such models
Oil Ministry felt it did not have a clear mandate to reduce rates post the January 2013 decision of the Cabinet to raise prices by 40-50 paisa a litre every month.
Tata Motors will launch a diesel-powered version of its ultra-cheap Nano by the end of March 2014, its managing director said, hoping to kick-start demand for the model after years of disappointing sales.
"There is no immediate plan to decontrol diesel or LPG as they have cascading effect (on general prices)," Minister of State for Petroleum and Natural Gas R P N Singh told reporters in New Delhi.
Under-recovery or revenue loss on diesel has risen to Rs 10.48 per litre from Rs 9.99 a litre in the first fortnight of December, an official statement said in New Delhi.
The government freed diesel pricing last October, providing a level playing field to private companies like Reliance and Essar Oil.
Generally, there is a price difference of around Rs 100,000 between petrol and diesel cars.
Move likely to be rolled back atleast for state transport undertakings
DaimlerChrysler India, which has a jatropha bio-diesel programme in place, said it would test its cars using the alternate fuel in Leh and other regions of the Himalayas.
This is the fourth increase in auto fuel prices since May 1
Maruti Suzuki India has hiked prices of its diesel cars by up to Rs 10,000 with effect from Monday on account of higher input costs and appreciation of Japanese yen.
Almost one and a half year after tying up with Reliance Brands, a unit of Mukesh Ambani's Reliance Industries, Diesel opened its first store in Mumbai in April this year.
With the latest diesel price rise, coming after a rollback of most of the earlier proposals for a passenger fare increase, Indian Railways' operational surplus is expected to come down by 24 per cent, to Rs 11,707 crore (Rs 117.07 billion) in 2012-13 as against the Rs 15,557 crore (Rs 155.57 billion) anticipated at the beginning of the financial year.
After a spike, losses on sale of diesel have fallen by nearly a rupee to Rs 2.49 per litre as international oil rates have moderated.
They definitely need a ramp of their own.
Diesel likely to get cheaper in New Delhi
Giving a quiet burial to the decision to dismantle Administered Pricing Mechanism for petroleum products, the government on Thursday said it will control the pricing of sensitive products like LPG, kerosene and diesel.
The Union oil ministry is considering a proposal to adopt differential pricing for diesel, under which industrial users like power utilities, will be charged market prices and retail consumers continue to be subsidised.
The government is preparing a national hydrogen road map and will launch a national mission on bio-diesel next month as part of efforts to encourage use of alternate fuels, the Lok Sabha was informed on Tuesday.
