Prime Minister Manmohan Singh has constituted an Empowered Group of Ministers (EGoM) to decide the freeing of petrol and diesel prices from government controls. A decision is likely after Parliament session ends on May 7.
The EGoM will be headed by Finance Minister Pranab Mukherjee and its decisions would not be required to be approved by the cabinet, a government official said. "We expect a decision (on fuel prices) to be taken in the next 10-12 days."
Petroleum secretary S Sundaresan confirmed the constitution of the EGoM.
Freeing of petrol and diesel prices from government control would mean a hike of Rs 7 per litre for petrol and Rs 6 per litre for diesel.
Cooking fuels, LPG and kerosene, may continue to be subsidised, the official said. Cooking gas (LPG) is being sold at a loss of Rs 265.27 per 14.2-kg cylinder. On PDS kerosene, oil firms lose Rs 18.42 per litre.
However, given the political fallout of such a steep rise in fuel prices, "the EGoM may even suggest a midway or a phased decontrol," the official said.
The hike in petrol and diesel prices was last implemented on February 26 as part of Budget 2010 proposals following changes in excise duties. Petrol price went up by Rs 2.71 a litre while diesel price was increased by Rs 2.55 a litre.
Petroleum Minister Murli Deora had asked the PM to constitute this EGoM in the backdrop of rising financial losses of the state-owned fuel retailers.