Dual pricing of diesel under consideration: Deora

New Delhi, Sept 5 (UNI) The government is considering a proposal for differential pricing of diesel, where owners of fuel guzzling vehicles and industrial users will pay a higher price than transporters or farmers.

''The proposal of dual pricing of diesel is under consideration.

It is a very difficult situation,'' Petroleum and Natural Gas Minister Murli Deora told reporters here.

The under recoveries for diesel this year are expected to be to the tune of Rs one lakh crore, he added.

Prime Minister Manmohan Singh had met Mr Deora on Tuesday to begin work on the proposal.

The move is being seen as a part of the efforts being made by the Ministry to curb unwarranted spurt in diesel demand which is hurting the state-run oil companies.

Imported private vehicles attract a tax of roughly 114 per cent, including customs. The new levy will be in addition to the existing levies and is being considered as a ban on vehicle imports was felt to be against India's WTO norms.

Diesel has traditionally been priced lower than petrol to keep costs low for farmers - who use it for running tractors, pumps and threshers - besides transporters.

The state-run oil companies have faced a problem as they lose more money on diesel than petrol because of the government's pricing policy.

The spurt in international crude oil prices over the last one year has seen this loss rise as the gap between diesel and petrol has widened to over Rs 10 a litre. The companies now lose Rs 13.69 on each litre of diesel against Rs 6.31 on petrol.

UNI SBA SR KP1340