Business, Economics and Jobs

India: No plans to raise diesel prices


Members from the All India Youth Federation (AIYF) and All India Students Federation (AISF) shout anti-government slogans and pull a rope tied to a car during a protest against petrol price hikes in New Delhi on May 25, 2012. Indian state-run oil firms announced the sharpest hike in petrol prices in nearly a decade to offset growing losses caused by subsidised rates, rises in the international oil price and a plunging rupee.

India is not currently considering an increase in the regulated prices for diesel and kerosene, the country's oil minister said Monday. 

Oil Minister Jaipal Reddy said no dates have yet been fixed for convening a meeting of a ministerial panel to decide on revising rates of diesel, LPG and kerosene, the Calcutta Telegraph reported.

Economists have called for an increase in diesel and kerosene prices to reduce the government's budget deficit and thereby attract foreign investors, but such a move would be politically dangerous for Manmohan Singh's United Progressive Alliance (UPA) government.

Already, Singh will face a countrywide general strike Thursday from the opposition Bharatiya Janata Party and Left Front in response to his move to increase petrol prices last week by the largest amount ever.

The good news is that Moody's said Monday that the rupee's plunge will not affect its rating on India's sovereign debt, though the higher cost of servicing interest payments will hit some Indian companies, India's Daily News & Analysis newspaper said.

Meanwhile, the rupee held its ground in trading, ticking upward to 55.19 against the dollar, from a record low of 56.4 last week.