India decided to deregulate the price of
diesel with immediate effect, a move described by many analysts as a bold one.
Finance Minister Arun Jaitley said "Price
of diesel will be linked to the market, and therefore, depending on whatever is
the cost involved, is the cost element consumers will have to pay".
With crude prices dipping to four-year
low, the over-recovery or profit on diesel sales, which was Rs 1.90 a litre in
first half of October, has now climbed to Rs 3.56 per litre.
State-owned fuel retailers made their
maiden profit on diesel in second half of September with a modest over-recovery
of 35 paise. This swelled to Rs 1.90 in first half of October and stands at Rs
3.56 per litre now.
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