Oil minister S Jaipal Reddy on Monday ruled out any price hike in diesel, kerosene and LPG for now. He added that no date has been fixed for a meeting of the Empowered Group of Ministers (EGoM), whose consent is required for any increase in the price of these three regulated commodities.

“We are not touching the prices of diesel, LPG and Kerosene as of now,” he said Monday afternoon. He said he had also met with Finance Ministry officials to discuss the impact of a diesel price hike on inflation.

Unlike petrol, the prices of the three fuels are administered by the government, which also bears the subsidy burden for them. Sources in the finance ministry have told NDTV that the EGoM on fuel is likely to meet on June 1 to discuss on problems faced by oil marketing companies (OMC) and the subsidy sharing mechanism for diesel.

Last week, OMCs raised the price of petrol by almost 10 per cent, prompting talk of a hike in administered fuels as well.

Experts have said India needs to raise the price of diesel if it wants to lower its fiscal deficit. Oil accounts for the single largest chunk of India’s imports, and is a significant contributor to both the current account deficit, as well as the pressure on the rupee.

The Indian currency has fallen to record lows over the past two weeks as it faces unprecedented pressure from both a weakening euro as well as steep demand from oil importers. The Reserve Bank of India has periodically intervened in the forex market to sell dollars and prop up the rupee and has relaxed certain regulations to attract dollar inflows.

HIGHER EXCISE DUTY ON DIESEL VEHICLES:

However, Jaipal Reddy said that he has written to the Finance Ministry to consider a higher excise duty on diesel cars. While the oil ministry has been asking for a hike in the excise duty on diesel cars, the heavy industries ministry is opposing the move.

The oil ministry has argued that the additional amount garnered can be used to make good a part of the loss that fuel retailers incur on the sale of diesel at government-controlled rates, sources said on Sunday.

With the recent hike of over Rs 6.28 per litre in petrol prices, the difference between retail prices of petrol and diesel has widened further. While the per litre diesel price in Delhi is around Rs 40, petrol costs as much as Rs 74.

The Kirit Parikh Committee on energy had also suggested a one-time additional excise duty of Rs 80,000 on diesel cars, arguing that it would offset the higher excise duty on petrol.

Diesel is the most consumed fuel in the country but is sold at a discount to its imported cost. The government is providing a subsidy of Rs 15.35 a litre to oil marketing companies for selling diesel at lower than market rates.

Subsidized diesel is the preferred fuel for the transport sector (both trucks and passenger buses) and is also used in irrigation pumps and other agriculture equipment.