With political parties, including the Left, opposing hike in fuel prices, Prime Minister Manmohan Singh on Monday warned government is not in a position to fully insulate the consumer from the impact of rising oil prices.

"We cannot allow the subsidy bill to rise any further. Nor do we have the margin to fully insulate the consumer from the impact of world commodity and oil price inflation," the prime minister said, addressing the Assocham's annual meeting in New Delhi.

Calling for a wider political consensus, Singh said the government could insulate poor people 'up to a point' and economic pricing of oil was essential to sustain growth.

However, he expressed confidence that the Indian economy would continue to grow at 8 per cent and above despite global slowdown.

India has maintained the economic growth of 9 per cent and above for the last three years.

While the government would remain focused on reversing the upsurge in inflation, the prime minister said, "We have to learn to husband our fiscal resources prudently."

Seeking industry support for taming the price rise, Singh said, "I do not wish to see a return to era of blind controls. . . At the same time, we have to have the fiscal means to protect the poor from adverse impact of inflation."

Despite the crude oil prices ruling in the range of $127 a barrel and causing huge losses to the state-owned oil marketing firms, the government has not been able to pass on the burden due to lack of political consensus.

There are differences within the government also as to how to resolve the crisis. The finance ministry and the Left parties are opposed to duty cuts sought by the petroleum ministry.

He said the government has not raised the price of kerosene in the past four years and LPG and diesel prices were 'only marginally raised.'

"Even petrol do not fully reflect the world trend. . . this situation cannot continue forever," he said.

Referring to high inflation rate, which has crossed 8 per cent mark, he said the government is focused on 'reversing the recent surge in the headline inflation rate.'

Wholesale price-based inflation for week ended May 17 stood at 8.1 per cent, against 7.82 per cent in the previous week.

"It has been our endeavor to tame inflationary expectations without hurting the rhythm of the growth process and also to protect the weaker sections against rising prices," he said.

Exuding confidence on the measures taken by the government, the prime minister said: "The policies we have adopted will yield results once the full impact of normal monsoon is felt."