Virtually ruling out roll back of the petrol price hike, Prime Minister Manmohan Singh on Thursday said the system would "collapse" if government continued to subsidise.
"You have to look at the country's interest," he told reporters at a function to mark the release of the Business India Year Book.
He said this was done in a situation where crude import prices were rising.
"It is a marginal increase," he said on being asked whether government will roll back the hike in the wake of stout opposition by Left parties and the Opposition.
"If you go on subsidising, the fiscal system will collapse," he said.
Government on Thursday decided to increase petrol prices by Rs two and diesel by Rs one, triggering widespread criticism with Left parties and BJP saying it would hit the common man hard.