While no diesel price hike was immediately announced, sources toldt that prices could be hiked in a week's time.There had been some speculation that the government would announce an increase in diesel prices, but Mr Moily said that decision will now be left to the marketing companies.
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The government is considering raising the price of diesel by Rs 1 per litre per month for 10 months. This will slash the fiscal deficit without creating the big outcry of a one-shot rise of Rs 10. However, many politicians fear that a higher diesel price will have a cascading effect on the prices of all goods transported by trucks and railways, and on farm produce.