Petrol and diesel prices are set to rise again. A decision to lift price controls on petrol and diesel may finally be announced on Monday.
Petrol prices are likely to go up by Rs 3 per litre and diesel by around Rs 2.50 per litre. Prices of cooking gas and kerosene are also likely to increase.
The Empowered Group of Ministers (EGoM) under Finance Minister Pranab Mukherjee is expected to take a decision on deregulation of the price of petrol (considered the rich man's fuel) on Monday.
The group of ministers is also expected to move towards gradual removal of controls on diesel and cooking gas (LPG) prices.
Global oil prices that have softened in the past two weeks, thanks to the European economic crisis, could well cushion the impact on consumers but a political backlash is almost a certainty.
The effect of the hike on inflation is another concern.
But the government is all set to bite the bullet in order to control its growing oil subsidy bill, estimated at Rs 90,000 crore for 2010-11.
Speaking to Hindustan Times, Petroleum Minister Murli Deora said he had met Prime Minister Manmohan Singh on Saturday to discuss the decontrol of fuel prices and was also due to meet the finance minister on Sunday ahead of the EGoM meeting on Monday.
"Any decision on decontrol will be taken only after keeping the interests of consumers and the common man," Deora said.
A hike in kerosene prices is also on the anvil, confirmed a petroleum ministry official.
"Hectic parleys on freeing fuel prices have already begun within the government. It (fuel decontrol) is certainly coming this time around," the official said.