Petroleum Minister Mani Shankar Aiyar on Tuesday indicated that the government would increase petrol, diesel and LPG prices, but also cut duties in a bid to contain the impact of surge in international oil prices.
"Finance Minister P Chidambaram and Planning Commission Deputy Chairman Montek Singh Ahluwalia have used the words which I have been avoiding," he told reporters in New Delhi, after flagging of a bikers' expedition to the Himalayas.
Chidambaram and Ahluwalia had on Monday stated that fuel price hike was inevitable.
Aiyar said a decision on raising fuel prices would be taken in consultation with the allies including Left parties.
"The Left has been suggesting cut in duties proportionate to the increase in revenues resulting from crude prices touching historic highs. We have put all these before the Cabinet and I do not know what the Cabinet will decide."
The petroleum ministry has suggested an increase of Rs 2-3 per litre in petrol and diesel prices and a Rs 20 per cylinder hike in LPG prices. The hike suggested is lower than the Rs 7.42 per litre hike in petrol and Rs 5.86 a litre increase in diesel prices warranted due to crude climbing to over $66 a barrel.
On LPG, the hike suggested is just one-fifth of the required increase while consumers are being completely spared from any of the Rs 11.21 a litre increase warranted in kerosene prices, officials said.
It has also suggested excise duty reduction on petrol from 8 per cent plus Rs 13 a litre to 8 per cent plus Rs 12 a litre and that on diesel from 8 per cent plus Rs 3.25 a litre to 8 per cent plus Rs 2.25 per litre, officials said.