The government is expected to slash petrol and diesel prices by Rs 4-5 a litre and diesel by Rs 1-2 per litre, as global crude oil prices have fallen in the recession-hit West.
The government is on Wednesday expected to slash petrol and diesel prices by Rs 4-5 a litre and diesel by Rs 1-2 per litre, as global crude oil prices have fallen on weakening demand in the recession-hit West.
The Petroleum Ministry is also pushing for a cut in cooking gas (LPG) prices, but oil companies are opposed to the idea, official sources said.
Petroleum minister Murli Deora called on external affairs minister Pranab Mukherjee to discuss the pricing issue ahead of an expected meeting of the Cabinet Committee on Political Affairs this evening.
Mukherjee would chair the CCPA meeting in the absence of prime minister Manmohan Singh, who is recuperating from a by-pass heart surgery.
Oil companies currently earn a profit of Rs 9.86 on sale of a litre of petrol and Rs 3.84 on every litre of diesel, while they incur a loss of Rs 12.16 on every litre of kerosene and Rs32.97 on a LPG cylinder.
Crude oil prices were trading higher at USD 42.25 a barrel in the New York Mercantile Exchange after gains in the bourses on higher-than-expected corporate earnings, but were way cheaper than the USD 147 per barrel recorded in July 2008.
The Indian government had last cut petrol and diesel prices on December 5 by Rs 5 and Rs 2 a litre, respectively. The move had then helped arrest inflation, which in turn helped authorities foster easy money policy to prop up economic growth.
Petroleum Minister Murli Deora said the Cabinet is meeting this evening to decide on the fuel price cut.
"In the evening there is a Cabinet meting and if there is any decision we will let you know," Deora said after meeting Pranab Mukherjee.
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