"Indian Oil Corporation has decided to increase the retail selling price of diesel by Rs.0.50 per litre, excluding state levies from midnight of Nov 30," the largest oil marketing company (OMC) said in a statement.
Allowing for local taxes, the prices per litre of diesel will be Rs.53.67 in Delhi, Rs.58.08 in Kolkata, Rs.60.70 in Mumbai and Rs.57.23 in Chennai.
The petrol price remains unchanged. While the petrol price is market-linked and revised periodically depending on the international crude oil price, the diesel price is subsidised and the OMCs are only allowed to hike it by a "small amount" every month.
"Even after the current increase, under recovery on retail diesel shall stand at Rs. 9.99 per litre," the IOC further said.
The OMCs, which review prices of diesel and petrol every fortnight, had last increased the diesel price by Rs.0.50 per litre on Oct 31, while the petrol price was cut by Rs.1.15 a litre.
IOC further said that it is suffering under-recoveries on sale of LPG (liquefied petroleum gas) cylinders and kerosene. On sale of LPG cylinders the IOC is suffering an under-recover of Rs.36.20 per litre and on LPG cylinder sale of Rs. 542.50 per cylinder.
For the year 2013-14, the IOC is expected to incur under-recovery of around Rs 72,000 crore on sale of three sensitive products including desel, while all the three OMCs combined are expected to incur under-recoveries of around Rs.1,39,000 crore.
The government fully subsidises sensitive products like LPG cylinders and kerosene. While it partially subsidises diesel price to protect the domestic economy from international crude oil cost fluctuation, as the country imports the majority of its oil needs.