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Diesel prices hiked by 50 paise per litre

New Delhi:

Oil companies on Monday hiked the price of diesel by 50 paise per litre, effective midnight on account of the depreciating rupee and increasing international prices.

The hike is excluding value added taxes (VAT).

After the revision, diesel prices in the four major cities stand as follows: Delhi- Rs 50.84 a litre; Kolkata- Rs 55.16; Mumbai- Rs 57.61; Chennai- Rs 54.15.

This is the sixth hike in diesel prices since January when the government permitted state-run oil companies to hike the price of the fuel by 45-50 paise per litre per month till the losses incurred on the sale of the fuel below market rates are wiped out.

Oil firms are currently losing around Rs 8.10 on the sale of every litre of diesel.

"Under-recovery on sale of retail diesel has been steadily increasing mainly due to depreciation in rupee coupled with increasing international prices. Even after the aforesaid increase, there shall still be an under- recovery (loss) on retail diesel of Rs 8.10 per litre," the country's largest oil firm Indian Oil Corp said in a statement.

Diesel prices were last increased May 31, by 50 paise.

Along with diesel, the government sells cooking gas (LPG) and kerosene at subsidised rates, and compensates the oil firms for selling the fuels at lower prices.

For the last financial year ending March 31, 2013, the under-recovery (losses) on the three products is estimated at Rs 1,60,000 crore.

Petrol prices were on Friday increased by Rs 1.82 on the depreciating rupee which fell to record lows last week and was the weakest performing Asian currency against the dollar.

(Also read: Rupee ends at 59,51, snapping two sessions of gains)

(With inputs from PTI)

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