Thu, 20 Sep 2012 20:48:00 GMT | By PTI

Moody’s warns govt against diesel price rollback

New Delhi: Cautioning the government against a rollback of diesel price hike, credit rating agency Moody's on Thursday said that any such step would limit its subsidy reduction plan.

Moody’s warns govt against diesel price rollback (© Reuters)

"If the government rolls back a part of the hike, as some coalition partners and members of opposition parties have demanded, the decline in subsidies will be smaller," Moody's said in its credit outlook report.

Battling huge fuel subsidy payout, the government raised diesel prices last week, the first time since June 2011, by Rs 5 a litre.

Moody's statement came on a day when opposition parties observed a nation-wide strike to protest against the price hike and government's move to operationalise its decision on allowing foreign direct investment in multi -- brand retail.

Moody's said the price hike would lower government's subsidy burden by Rs 20,000 crore in the current fiscal to an estimated Rs 1.7 lakh crore.

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