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HindustanTimes Sat,19 Apr 2014

Govt panel recommends 9.5% hike in diesel prices

Reuters  New Delhi, October 30, 2013
First Published: 16:08 IST(30/10/2013) | Last Updated: 16:12 IST(30/10/2013)

Diesel prices should immediately be raised by about 9.5%, a government panel recommended on Wednesday, along with other measures aimed at cutting the huge oil subsidy bill.

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The panel, set up in May to advise the government on fuel pricing, also suggested capping the subsidy on diesel sales at 6 rupees a litre, oil minister S Veerappa Moily told a press conference.

The recommendations of the committee are not binding and need cabinet approval to be implemented. With state elections looming from November and a general election due by May 2014, the government may find it difficult to raise domestic fuel prices sharply.

India, the world's fourth-largest oil importer, needs to rein in subsidy spending to help stabilise its finances and support the rupee, which hit a record low earlier this year.

The diesel price hike could cut the government's fuel subsidy bill by as much as 160 billion rupees from November 1 to the end of the current fiscal year on March 31, 2014.

Diesel accounts for over 40% of refined fuel use in the country.

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