New Delhi, Feb 3: The Union Cabinet, headed by Prime Minister Manmohan Singh will take a final decision on the recommendations of the Group of Minister (GOM) for a hike in prices in petroleum products its meeting tomorrow.
According to official sources, the Cabinet meeting is scheduled to held at 1600 hrs tomorrow. Earlier, the GOM on Petroleum prices, headed by the External Affairs Minister Pranab Mukerjee, left the final decision for any hike in petroleum prices for the cabinet. The GOM however, is understood to have narrowed down the price hike to two options under which the petrol price could either be raised by Rs 4 or Rs 2 per litre and that of diesel by Rs 2 or one per litre.
However, the Petroleum Ministry is said to be opposed to even for a marginal increase in fuel prices and instead keen on a cut in excise duties on petrol and diesel.
The official said the Cabinet will have to decide between raising of fuel prices, an option backed by Finance Minister P Chidambaram and cutting duties as desired by the Petroleum Minister Murli Deora.
Sources said that Mr Deora and Mr 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, Mr Chidambaram was asked to cut customs duty on crude oil and petroleum products and a reduction in excise duty by Rs one a litre 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 added.