New Delhi, May 23 : Union Petroleum Minister Murli Deora said today that the government is contemplating immediate action to contain losses of public sector oil companies due to surging oil prices in the international markets.
Deora said that he has discussed the issue with Prime Minister Manmohan Singh.
"We are trying our best to take immediate steps, last night I spoke to the prime minister. We met him after dinner and now we are meeting in the cabinet and we will see to it that some action is taken immediately because the oil companies are really suffering," said Deora.
The Petroleum Secretary M.S. Srinivasan had earlier said that an increase in domestic fuel prices was inevitable and the government would work out the size of the rise by this evening. "We expect a decision in 3-4 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.
Any rise in fuel prices could be politically damaging to a government facing crucial state elections over the next few months and it was already under pressure to control inflation.
On May 6 Srinivasan had said that the government was unlikely to raise fuel prices soon, but crude oil prices have risen about 15 dollars a barrel since then, prompting a rethink.
A fuel price rise would add to the inflationary pressures, which has surged to a three and a half year high of 7.8 per cent because of soaring food and metal prices.
India's domestic diesel sales rose 11.1 percent in 2007/08 (April/March), the biggest increase in 12 years, and petrol sales rose 11.2 percent, the biggest increase in eight years.