New Delhi: In yet another blow to the common men’s pocket, the diesel prices are likely to go up. The Centre is mulling to hike diesel prices by Rs 2 per litre.

Petroleum and Natural Gas Minister Jaipal Reddy will soon submit a proposal in the GoM headed by Finance Minister Pranab Mukherjee.

This move is being seen as a bid to provide relief to government run oil companies from purchasing expensive crude oil. Presently, the oil companies are facing a loss of Rs 7 per litre on diesel.

According to the sources in Petroleum Ministry, circumstances are such that increasing the prices of diesel is the only option left.
The Centre does not levy any additional charges on diesel. Only the surcharge amount invested in education and roadways is realized through diesel prices.

However, Reddy will analyse the affect of hike in diesel prices on inflation and only then submit the rising cost of Rs 2 per litre. By this move, the oil companies will reduce losses of around Rs 15, 000 crore.

The government run oil companies incurred loss of Rs 28, 680 crore in April-June 2011.

According to sources, after September 16, the prices of crude oil shot up to USD 106.90 and if the prices are not increased the oil companies will incur losses of around Rs 60, 000 crore.

Apart from this, companies are also facing losses on LPG and kerosene following which they are mounting pressure to increase diesel rates.