Citing the depreciating rupee, as a matter of concern, the Union government is likely to increase diesel prices at least by Rs 3 a litre after the end of monsoon session of Parliament next week. UNion Oil Minister M Veerappa Moily said though there was no proposal to hike diesel prices for now depreciating rupee threatens to widen the government's fuel subsidy bill.
With the rupee falling past the 68-mark against the dollar on August 28 State-owned oil companies have to pay more to buy crude from abroad. If retail fuel prices are not raised by a commensurate level, the difference has to be borne by the government.