The Union Cabinet is believed to have approved a 'moderate' increase in the price of petrol and diesel in view of the surge in international crude prices.
No announcement was made after the Union Cabinet meeting held in New Delhi on Tuesday morning, but sources said an official announcement is expected in the evening.
The increase in petro-product prices has been necessitated by rising global costs of petroleum and the fact that the price of petrol and diesel has not been increased in India since January 2004.
The proposal to increase the auto fuel prices and revise the subsidy scheme for cooking gas and kerosene came up at the Cabinet meeting.
Sources say that petrol and diesel prices are likely to be raised by about Rs 1 to Rs 1.50 per litre.