The Cabinet, headed by Prime Minister Manmohan Singh, is likely to meet on Monday to consider raising petrol and diesel prices necessitated due to a surge in international crude oil prices.
"As of now, the Cabinet is scheduled to meet at 4 pm tomorrow," a senior government official said.
Petroleum minister Murli Deora is, however, opposed to even a marginal increase in fuel prices and is instead seeking a cut in excise duties on petrol and diesel.
The official said the Cabinet will have to decide between raising of fuel prices that has the backing of Finance Minister P Chidambaram and cutting duties as desired by Deora.
Four of the seven-member Group of Ministers on fuel prices, headed by External Affairs Minister Pranab Mukherjee, had met on Thursday last week and decided to leave the final decision to the Cabinet.
The GoM was understood to have narrowed down to two options - raising petrol price by Rs 4 or Rs 2 a litre and diesel by Rs 2 or Re 1 per litre.
Deora and Mukherjee, along with Agriculture Minister Sharad Pawar and the Finance Minister, had dropped the idea of raising domestic cooking gas (LPG) prices and instead asked the Finance Minister to cut excise duties.
To effect a minimal price hike, Chidambaram was asked to cut customs duty on crude oil and petroleum products and Re one a litre excise duty reduction on petrol and diesel to avoid the around Rs 71,000 crore loss on fuel sales expected by the state oil firms in 2007-08 fiscal, sources had said.