Hike in diesel prices will impact the common man most in many forms, which is already reeling under the burden of inflation. Farmers across the country will also be hit as diesel price hike will increase their input cost. The diesel price hike will raise the cost of transportation of goods through trucks and will prompt railways to raise its passenger fares.
Notably an empowered group of ministers (E-GoM) have the power to raise diesel prices and this group of ministers has met last time on June 25, 2011. While petrol is fully deregulated by the government and the oil marketing companies have the freedom to raise the prices, however, diesel prices are regulated by the government and price hike is entirely in its hand.
Though due to the escalating fiscal deficit the government has always expressed its views to de-regulate diesel prices but could not do so due political implications of the move.