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India’s oil min wants market diesel price for industry

Posted by Yogesh on Monday, 8 September, 2008

NEW DELHI, Sept 8 – India’s oil ministry will soon seek cabinet approval to charge higher diesel prices for industrial users and power plants to curb surging demand and rising subsidies, a top government official said on Monday.

The ministry is also seeking an additional 25 percent tax on large cars running on diesel, theofficial, who did not want to be named, told Reuters on Monday.

“It is difficult to charge higher prices from big car owners so we are thinking of imposing 25 percent cess on the car price,” he said, adding the ministry envisages diesel being sold at market rates to all industrial customers other than the railways and state transport corporations.

“We are in process of consultation with other ministries and we will soon send a proposal to the cabinet,” he said.

Private vehicle owners have largely been shielded from surging crude prices as state-set fuel rates have been increased moderately.

Diesel consumption in India has been rising sharply because the subsidised fuel is cheaper than fuel oil, luring industrial users.� Source Reuters

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