Petrol prices are likely to be raised by about Rs 1.82 a litre, the second hike in less than two months. The hike - expected within a fortnight - has been necessitated by rising crude prices and falling value of the rupee against the dollar, which have made imports costlier.
The move comes at a time of runaway inflation. But state-run oil companies pushed for the hike, citing rising "under-recoveries" or selling at a price lower than what the cost mandates.
"From today, there are some losses on petrol. To cover them, we may have to increase prices," B Mukherjee, director (finance), Hindustan Petroleum Corporation Limited, said.
The rupee has been badly hit by a sputtering global economy, plunging to a 30-month low and breaching the psychological barrier of 50 to a dollar recently.
Food inflation rose 11.43% in the week ended October 15, the sharpest in six months.
Petrol prices were last raised on September 16 by Rs 3.14 a litre.
Mukherjee didn't say when the hike would come.
"We are in consultations," he said.
"Let's say, we are toying with the idea. It may happen. We will see."