Diesel prices to be fully deregulated in two months: Veerappa Moily

MUMBAI: Union Oil Minister Veerappa Moily today expressed confidence that diesel prices would be completely deregulated in the next two months.

"We still hope that in the days to come and within a couple of months, we are going to deregulate diesel prices completely," Moily said at the Bloomberg TV India Autocar Awards function here.

The government would have achieved complete deregulation of diesel earlier but for the sharp currency depreciation during the year, he said.

Japanese brokerage firm Nomura had yesterday said that Congress' weak performance at the recent assembly elections and high inflation may force the government to rethink on its monthly diesel hikes.

Diesel is one of the last fuels to be completely deregulated and aligned to the international prices. In the present circumstances, deregulation may lead to a heavy increase in its prices.

In order to avoid this, the Government has decided to take steady steps in order to align the prices by increasing the cost by 50 paise per litre per month.

In the absence of the deregulation, the oil marketing companies report an under recovery.

Fuel retailers Indian Oil Corp (IOC), Bharat Petroleum Corp ( BPCL) and Hindustan Petroleum Corp ( HPCL) lost Rs 60,907 crore on sale of diesel, LPG and kerosene in the first half of current fiscal.

The total under-recoveries on diesel and cooking fuel in full fiscal could be around Rs 143,800 crore.

On the economic growth scenario, Moily said the fundamentals of the economy are still strong and the country will not face any crisis on the growth front. "Even in the face of euro zone crisis and global meltdown, we have demonstrated our national will that our fundamentals are strong and when the fundamentals are strong, I don't think we will face any crisis," he said.