New Delhi: Any increase in retail prices of petrol and diesel in India will be "minimal" and a panel of ministers widely expected to recommend a rise will meet again on Friday, top oil ministry officials said.
India caps prices of widely consumed fuels to protect the poor and keep inflation under control, and there has not been an increase for more than 18 months.
But with state oil firms losing millions of dollars a day as global crude prices roared to historic highs in recent months, topping $100 a barrel, the government has been under pressure to raise retail prices or revise duties.
"Crude prices have already crossed the $100 mark ... If we raise it [retail rates], it will be minimal," union petroleum minister Murli Deora told reporters on Friday.
"We will see that people will not suffer."
Deadlock
A group of ministers headed by Foreign Minister Pranab Mukherjee met on Thursday to discuss a possible price rise, which carries significant political risk with state and national elections due this year and next. But the meeting broke up without a decision.
The top official in Deora's ministry, petroleum secretary MS Srinivasan, said a follow-up meeting was planned for the weekend. The panel's suggestions will have to be agreed by the cabinet.
"The external affairs ministry has indicated that the meeting will take place sometime Saturday evening. We want them to convene a cabinet on Monday," he said.
Senior oil ministry officials were scheduled to travel overseas to promote India's latest auction of oil and gas assets later in the week, he added.
The price of India's crude basket has risen by about 170 per cent since April 2004, jumping from $32.37 a barrel to $87.17 on January 16, but retail prices of petrol have gone up by just 29 per cent and those of diesel by 40 per cent.
Raising fuel prices risks adding to inflationary pressures and triggering pro-tests from communist allies who provide the ruling Congress-led coalition with a parliamentary majority.
Data yesterday showed annual inflation at its highest in more than four months at the start of January, at 3.79 per cent.
A newspaper reported on Thursday that Congress party chief Sonia Gandhi and Prime Minister Manmohan Singh had stressed to the head of the panel that any increase "should be kept minimal and if possible avoided".
India's last fuel price increase was in June 2006, when retail petrol prices went up by 9.2 per cent and diesel by 6.6 per cent to stem losses at state firms after being frozen for nine months.
