In a deregulated regime, oil companies will adjust diesel prices at periodic intervals to reflect the prevailing international price of oil, just as they do now in the case of petrol
With the Cabinet decision, the price of diesel, like petrol, would now stand linked to the market without any government intervention, with retail rates reflecting price changes in the global market.
It was a long-awaited reform measure but when the Narendra Modi led NDA Government eventually deregulated diesel pricing on Oct 19,2014, the timing, in the backdrop of falling global oil prices, was just perfect.
With oil companies wiping off the under-recoveries on diesel and going into surplus, the government could sweet-coat what is essentially a bitter pill with a cut in retail price of the transportation fuel
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