Twenty months after the government allowed partial deregulation of prices, diesel prices are finally close to parity with the international market. A stable currency, soft crude oil prices and the 50 paise per month hike in local diesel prices meant that under-recovery on this fuel is only 8 paise per litre as on Monday. That is indeed something to cheer as it will cut the subsidy burden of the government. Credit rating agency Icra Ltd estimates that if these conditions remain the same (stable currency, low crude prices) diesel subsidy for the current fiscal year could reduce to Rs.15,000 crore from Rs.62,800 crore a year ago.

Source - http://www.livemint.com