Decision on diesel price hike at right time: Oil minister

“The price of diesel can be increased only in small instalments. Economy is largely depending on diesel price. Any increase in price will have a cascading affect. Therefore, any increase should be done carefully,” oil minister Jaipal Reddy said

Hyderabad: Oil minister Jaipal Reddy today said the government will take a decision on increasing diesel prices at an “appropriate time”, reports PTI.

He also said it is difficult to implement deregulation of diesel prices.

“The price of diesel can be increased only in small instalments. Economy is largely depending on diesel price. Any increase in price will have a cascading affect. Therefore, any increase should be done carefully,” he said.

“At the moment the inflation is coming down. Therefore, we will wait for the appropriate moment and will talk to state governments and take decision at appropriate time,” he added.

Replying to a query on deregulation of diesel prices, the minister said it cannot be implemented soon. “It is for economist to give advice. For politicians, it is difficult to implement,” he said

Mr Reddy also denied that the decision on diesel price hike is linked with the ensuing assembly elections in five states.

The government had in June 2010 deregulated or freed petrol prices from all price controls, but diesel prices are regulated and are highly subsidised.

On the payment issue to Iranian oil companies, Mr Reddy agreed that issue is problematic and the government is trying to resolve it.

“New problems are no doubt arising with the sanctions.

However, I would like to assure everybody there will be no supply problems of oil and oil products for the consumers. We are trying to solve the problem of payments to Iran,” he said.

India gets about three-quarters of its crude needs through imports and Iran is its second-largest supplier after Saudi Arabia.

Trouble started for Indian oil companies after US president Barack Obama signed a Bill into law late last month empowering US authorities to impose penalties on foreign banks dealing with the Central Bank of Iran to settle oil import payments.

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