Government may raise petrol price by Rs 2 a litre and diesel by Re 1 a litre this week, but a duty rejig to minimise impact of high international crude oil prices looks unlikely.
"The proposal to the Cabinet will be for a Rs 2 per litre hike in petrol and Re 1 per litre hike in diesel prices," a Petroleum Ministry official, who wished not to be identified, told reporters in New Delhi.
The decision on the quantum of increase will be taken by the Cabinet headed by Prime Minister Manmohan Singh, possibly later this week.
"Earlier, we were given an indication of a Cabinet meeting this (February 4) afternoon, but it is not happening today... hope the meeting takes place soon," he said on Monday.
The official said state-run Indian Oil, Bharat Petroleum and Hindustan Petroleum are together projected to lose over Rs 71,000 crore (Rs 710 billion) on sale of petrol, diesel, domestic LPG and PDS kerosene this fiscal as the government has capped retail prices.
"We wanted a cut in customs duty on the products as well as crude oil and also a Re 1 a litre reduction in excise duty on petrol and diesel. But, I don't think that is happening just now," the official said.
The state-run firms lose Rs 10.57 per litre on petrol, Rs 11.56 on diesel, Rs 19.89 on kerosene and Rs 331 on each LPG cylinder.
Last week, a group of ministers headed by External Affairs Minister Pranab Mukherjee had left a decision on fuel prices to the Cabinet after the panel was split right in the middle on the issue. Petroleum Minister Murli Deora insisted on a duty cut rather than price hike, while Finance Minister P Chidambaram was of the opinion that it cannot be just one way street.