New Delhi: The Reserve Bank of India (RBI) on Monday suggested the Centre to completely deregulate retail prices of diesel. If the government pays heed to the decision of the RBI then diesel prices are expected to shoot up by Rs 14 a litre. However, the government in the near future does not seem to be in a position of doing so.

The RBI has also advised the Centre to bring the domestic prices of coal in accordance with the international prices. RBI has said, “The revision of prices in coal and diesel is necessary so that inflation and fiscal deficit could be gauged correctly”.

While presenting the third quarterly monetary policy review (2011-12), RBI governor D Subbarao on Tuesday highlighted the need to deregulate the diesel prices. RBI for long has been advising the Central government to rationalize the prices of all energy resources.

The low prices of petroleum products have certainly increased the burden of subsidy on the government. The petroleum ministry have projected that the oil companies are likely to incur a colossal loss of Rs 1.45 lakh crores of which Rs 70,000 crore will be borne by the government.

According to the officials of the petroleum ministry, the government is not in a position to hike petroleum prices as it will put burden on the common man who is already bearing the brunt of inflation.