Finance Minister P Chidambaram said that the government will have to look into various dimensions of the issue before taking any decision on deregulating diesel prices.
"The government has to take into account several dimensions of issue before decision can be taken," he said, when asked about the possibility of deregulating diesel prices.
The issues concerning diesel are not unidimensional, the Minister said, adding while some argue for deregulation, the others say that it would fuel inflation.
"On one column (of a newspaper) you will say, deregulate diesel price and on another column you will say inflation (will rise). These are not unidimensional issues, you cannot approach a issue from one dimension," he said.
Overall inflation in November stood at 7.24%, much above the Reserve Bank's comfort level of 5-6%.
The government had in 2010 taken an "in-principle" decision to deregulate diesel prices, but could not implement it because of political pressure. The decision was based on the recommendations made by Kirit Parikh committee.
Price of diesel, which currently costs Rs47.15 per litre in Delhi, was last revised on September 14 when it was hiked by a steep Rs5.63 per litre.
The government has promised a cash support of Rs30,000 crore to the oil marketing companies to cover a part of the Rs85,586 crore revenue loss on fuel sales during April- September.