The Government has increased the price of diesel by five rupees per litre. However, there has been no increase in prices of petrol and PDS kerosene.

The Cabinet Committee on Political Affairs, CCPA, in its meeting chaired by the Prime Minister Dr. Manmohan Singh yesterday also decided to restrict the supply of subsidized LPG cylinders to each consumer to six per year. The new prices came into effect from last midnight.

The revised Retail Selling Price of Diesel in Delhi is approximately 47 rupees per litre, however, branded Diesel will be sold at the market rate.

An official release said that the subsidized cylinders will continue to be available at 399 rupees per cylinder in Delhi. The market rate of LPG cylinders at non-subsidized rates will be notified by Oil Marketing Companies, on a monthly basis.

The above decisions will reduce the under-recovery of companies by about 20,300 crore rupees. The under-recovery for 2012-13 will be about 1,67,000 crore rupees.

Trinamool Congress chief Mamata Banerjee has expressed her unhappiness over hike in diesel price. Demanding an immediate rollback in diesel prices, the Samajwadi Party, which provides outside support to the UPA, said, the decision is ill-timed.

The BJP termed the price hike as a mortal blow to the common man and farmers . The Party leader Ananth Kumar said that the hike will severely affect common man.

CPI leader Atul Anjan said the increase will increase inflation further.

The Congress has said that the government had reluctantly taken the decision to increase the price of diesel.

Party spokesperson Rashid Alvi said that the price of diesel and other petroleum products depends upon international market which are increasing.

The government has said that the difficult decision to hike the price of diesel has been taken in view of the disturbing situation arising out of the projected massive under-recoveries or loss to the Public Sector Oil Marketing Companies, OMCs, to the tune of 1,87,127 crore rupees for the financial year 2012-13.

The under-recoveries have risen in the wake of high international crude oil prices and sharp depreciation of Indian Rupee against US Dollar.

The above decisions will reduce the under-recovery of OMCs by just about 20,300 crore rupees and the under-recovery for 2012-13 will still be about 1,67,000 crore rupees which is more than the under-recovery of 1,38,541 crore rupees incurred by OMCs during 2011-12.