Finance Minister Arun Jaitley has announced that the Modi-led Government has decided to deregulate diesel prices, which means that retail rates will now reflect international movement in oil prices. The market-led pricing strategy has already been implemented as diesel prices have already gone down by Rs.3.37 a litre(Delhi)- given the considerable reduction in international crude oil prices.
Diesel prices were last slashed way back on January 29, 2009 when they were reduced by Rs.2 a litre to Rs.30.86- marking this the first reduction in five years. Petrol and diesel prices were deregulated last in April 2002 when the Atal Vihari Vajpayee-led NDA government was in power.
At the moment, the Government is heavily burdened with the subsidy levied on diesel prices- the first quarter of this fiscal (April-June 2014), saw an under-recovery burden of Rs 9,037 crore- this move aims to ease up the budget considerably.