In a landmark decision, the empowered group of ministers (EGoM), working on petrol and diesel prices, on Friday decided to deregulate prices of the two most important fuel.

The prices of petrol and diesel will now be linked to ongoing market price of crude.

As per the EGoM, the government will not subsidize petrol and diesel prices in future, which means Indian consumers will now have to shell out more money for fuel when prices of crude goes up in the international market.

At the same time this also means that if crude prices fall consumers will be directly benefitted.

However, for the mean time, the government today raised petrol prices by around Rs.3.50, while diesel price was increased by Rs.2. Kerosene, which had not seen a price rise since 2002, also witnessed a rise of Rs.3 in its prices. Price of LPG cylinders was also hiked by nearly Rs.35 per cylinder.

The EGoM, headed by Finance Minister Mr. Pranab Mukherjee, also had Oil Minister Murali Deora, Power Minister Sushil Kumar Shinde and Planning Commission Deputy Chairman Montek Singh Ahluwalia as its members.