India will decide on raising the retail prices of diesel and cooking gas (LPG) in a few weeks, oil secretary Vivek Rae said on Thursday, in a bid to cut the biggest item in its import bill and support the rupee.
India, the world's fourth-biggest oil consumer, is considering a Rs. 3 to Rs. 5 hike in the price of diesel, which accounts for more than 40% of fuel use, government officials said last week, as the country looks to cut import costs by nearly $20 billion to trim a record current account deficit.
A recent sharp recovery in the rupee, which had hit a record low of 68.85 to the dollar on August 28, and a fall in global crude prices following an easing of geopolitical tensions -- with an attack on Syria appearing less imminent -- have taken off some pressure from the government finances, Rae said.
Fuel price rises generally provoke stiff resistance from opposition parties, and any increase now is expected to draw a bigger protest as India approaches a general election. The election must be held by May 2014.