Diesel Deregulated

Prime Minister Narendra Modi put some money into people's pockets ahead of Diwali by lifting government control on diesel pricing, a move that immediately brought down pump prices of the most-consumed fuel sharply .This marks the first reduction in diesel prices since September 2010. Announcing the decision, finance minister Arun Jaitley said from now on the fuel's retail price would reflect movement in global oil prices.
IndianOil chairman B Ashok indicated that state-run retailers would continue with the system of revising prices every month for now. Since January 2013, diesel prices have been raised 19 times by 50 paise per litre till September 1, after which retailers started making profit on the back of falling crude prices.
The move will bring down the subsidy burden and help bridge the fiscal deficit.

Oil prices have dipped to four-year lows, with global benchmark Brent crude ruling at $83 a barrel. Lower diesel prices are expected to bring down freight rates by 3-4%.This alone should reduce the cost of daily living. Diesel is the main fuel for transporters and directly affects the retail price of items ranging from foodstuffs to white goods that are transported across cities.
This is the second time that diesel has been deregulated. The NDA government under Atal Bihari Vajpayee had in April 2002 deregulated petrol and diesel for the first time, maintaining the time-table set by the United Front government.
The UPA-1 government under Manmohan Singh reversed that decision under Left pressure once global oil prices started rising. In January 2013, the UPA-2 government freed up petrol pricing but decided to stagger deregulation of diesel pricing to avoid a shock to the economy .
The first round of deregulation had changed the contours of the fuel retail market as private companies like Reliance Industries Ltd, Essar Oil and Shell entered the fray . Their swanky outlets and service ushered in real competition forcing state-run retailers to improve their customer service and products.