Estimating diesel under-recoveries, or losses, to fall to 30 paise a liter after the price hike on September Goldman Sachs said in a report, "This implies we could effectively be done with the monthly cycle of diesel price increases in next two months and diesel will be market-priced."

In January 2013, the government allowed oil marketing companies (OMCs) to monthly raise diesel rates in small doses of 40-50 paise a liter towards wiping out losses. Since then, rates have cumulatively risen by Rs.11.24 per liter in 18 installments.

OMCs, effective Aug 16, are incurring combined daily under-recovery of about Rs 230 crore on the sale of diesel, PDS kerosene and domestic LPG.  Meanwhile international crude prices hovered near 14-month lows of USD 100 a barrel as worries over conflict in Iraq eased, and as higher Libyan oil output added to ample supplies coupled with weak demand. Price of Indian basket on Monday decreased to USD 100.04 per barrel.

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