Tank up! Petrol may go up by Rs 10, diesel by Rs 5

FUEL ON FIRE: Petroleum Minister Murli Deora will meet PM with his proposal.

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Keywords: Inflation, Diesel

New Delhi: The Petroleum Ministry wants to increase petrol price by Rs 10 per litre and diesel price by Rs 5 per litre. They also want to reduce customs and excise duties to offset the impact of surge in crude oil prices that have touched $135 per barrel.

"The situation is getting to be alarming. We need to stem the rot in the beginning," Petroleum Secretary M S Srinivasan told reporters after a meeting with the heads of state oil companies.

Srinivasan however, said the Cabinet meeting scheduled for Friday would not consider raising fuel prices as the subject needed some more preparation and a note would be moved to the authorities in a day or two.

"We expect a decision in three-four days time,” he said, adding the Ministry was suggesting a combination of price hike and duty cut to lower the projected Rs 2,00,000 crore under-realisation on sale of petrol, diesel, LPG and kerosene.

"The price hike is inevitable," he said but refused to say what quantum of hike the ministry was seeking. The Ministry was seeking a lowering of customs duty on crude from 5 per cent to zero and import duty on petrol and diesel from 7.5 per cent to 2.5 per cent.

Besides, the Ministry was also seeking cut on excise duty on the two products. Petroleum Minister Murli Deora said he had discussed the situation with the Prime Minister Manmohan Singh Thursday evening and will raise the issue again today to seek and early meeting of the Cabinet.

"We are trying to see that some action is taken immediately," Deora said.