According to sources, while diesel prices are likely to be hiked by 50 paisa, petrol prices may get dearer by Rs 1 per litre.
An official has been quoted as saying, "The benchmark international prices of gasoline (petrol) firmed up in the last fortnight."
"So, the quantum of a petrol price hike in India will be in the vicinity of Re 1 per litre," added the official.
Earlier Oil Minister M Veerappa Moily had stated that Diesel prices will be hiked by 40-50 paise per litre every month till losses on the nation's most used fuel are completely wiped out.
The government had on Jan 17 decided to move towards deregulating or freeing diesel prices from state control and gave powers to state-owned oil firms to raise prices in small measures every month till all of their losses are wiped out.
Diesel is currently sold at a loss of over Rs 10.80 per litre. On Jan 17, oil firms hiked diesel price by 45 paise. After including local VAT, the increase in Delhi came to 50 paisa.
The diesel now costs Rs 47.65 a litre in the capital. Moily said the decision to raise diesel prices in small doses every month will stand "until further orders".
He, however, did not say when the oil firms will effect the second price increase. The decision for retail price hike was coupled with a move to charge bulk consumers like defence, railways and state transport undertakings market price which is almost Rs 10 a litre more than retail selling rate, to save an estimated Rs 12,907 crore in annual subsidy.
(With PTI inputs)