Govt of India frees diesel pricing partially - all essential commodities will become more expensive

In a cabinet meeting presided over by Prime Minister Manmohan Singh, it was decided to partially decontrol pricing of diesel, giving the state-run oil marketing companies to "make small corrections in pricing from time-to-time".

In a related decision on India's petroleum sector, it was also decided to raise the annual allocationof subsidised cooking gas from six to nine cylinders per household.

The government had earlier limited the number of subsidised cylinders to six per annum. Thedecisions on diesel and cooking gas take immediate effect, officials said.

"Oil marketing companies have been given the freedom to make small corrections from time-to-time," Finance Minister P.Chidambaram said, even as officials said the oil marketing companies could revise prices by an amount less than Rs 1 per litre at one go.
"Diesel goes into the prices of all essential commodities. Whether it is food grains, vegetables, fruits, diesel becomes a component when price escalation takes place," West Bengal Finance Minister Amit Mitra said.

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