With oil companies losing Rs 333 crore per day on selling fuel below cost, Petroleum Minister S Jaipal Reddy has sought a meeting of a high-powered ministerial panel to decide on revising the rates of diesel, domestic LPG and kerosene.
"I have asked for a meeting of the Empowered Group of Ministers (EGoM)," Reddy told reporters after a meeting with finance minister Pranab Mukherjee, who heads the EGoM.
He said revenue losses of India's oil marketing companies because of sales at subsidised rates are expected to hover at 1.3 trillion rupees ($26.38 billion) in this fiscal year ending March 31, 2012.
India subsidises retail prices of diesel, kerosene and cooking gas but petrol prices were liberalised over a year ago.
The costs of these price caps have climbed as international oil prices have risen. ($1 = 49.275 rupees)
State-owned oil firms are currently losing Rs 9.27 per litre of diesel, Rs 26.94 per litre of kerosene sold through the public distribution system (PDS) and Rs 260.50 per 14.2-kg LPG cylinder supplied to households for cooking purposes.
The EGoM "meeting would take place before the Winter Session of Parliament", beginning on November 22, he said, adding that a decision on raising prices may "not be easy".
The ministerial panel is essentially a consensus-building body of the Congress-led UPA government and comprises key allies like the DMK, TMC and NC. The allies had in September scuttled plans to limit the supply of subsidised LPG cylinders to 4-6 per household in a year so that subsidies can be cut.
Reddy said his ministry would push for raising prices of all three regulated products, diesel, LPG and kerosene.
On oil companies pressing for a hike in petrol prices, he said PSUs were fully empowered to take a view, keeping in mind rising crude oil prices and depreciating rupee.
"Our ministry does not administer" the price of petrol, which was freed from government control in June last year, he said.
On Tuesday, HPCL Director (Finance) B Mukherjee had said that oil firms may have to raise petrol prices, as they were losing Rs 1.50 per litre at the current rates.
(With inputs from Reuters)