The oil ministry may once again allow state transport utilities (STUs) to buy diesel at subsidized rate, Oil Minister Veerappa Moily said.

Moily said that the oil ministry was mulling a plan to roll back its order that made it mandatory for STUs to purchase diesel at market price.

Speaking on the topic, Moily, "The oil ministry is mulling the withdrawal of the order that made it mandatory for STUs to buy diesel at market price. We have received representation from various states on the issue.”

Surprisingly, the ministry started mulling the withdrawal of the concerned order just a week after the Supreme Court (SC) endorsed the government’s order.

STUs had challenged the government’s order asking bulk users, including the railways and defence, to purchase diesel at market price in January this year.

Government-run oil marketing companies (OMCs) have been incurring huge losses on subsidized fuels like diesel, which currently costs the companies Rs 14.50 a litre more than the pump price.

The ministry’s decision of withdrawing the decision is being seen as a political rather than rational decision.