The government raised the commission paid to petrol pump dealers and this has an instant effect on the diesel prices.
The last hike in diesel prices was seen on Nov 30 by 50 paise per litre and this is the 12 hike since January.
The government is allowing oil companies to raise prices in small numbers every month so that the companies can wipe out the losses that they incur.
"Public sector oil marketing companies were requested by the ministry to rework the quantum of dealer's commission on diesel (as due) keeping in mind escalations that may have occurred in the meantime.
The industry worked out the same and submitted its recommendations to the ministry," according to the official statement.
With PTI inputs