"It was expected that the Cabinet would this week take a decision on the issue that has been hanging for months now.
But the agenda for the tomorrow's Cabinet meeting does not list fuel price revision as an item for consideration," a Petroleum Ministry official said.
A Rs 2 a litre increase in petrol and Re one per litre hike in diesel prices is being contemplated but a duty rejig to minimise impact of high international crude oil prices looks unlikely.
The official, however, added that such sensitives items are sometime added to the Cabinet agenda at the last moment.
On his part, Petroleum Minister Murli Deora remained non committal. "The Cabinet is to meet tomorrow (afternoon). But I can't say if this (fuel price revision) will be discussed." Insiders said several quarters within the ruling UPA alliance were opposed to even a marginal auto fuel price increase and that probably has kept the issue hanging.
Petrol and diesel price increase and possibly also domestic LPG rate hike had been on cards since October-end when international crude oil prices touched record high, but political compulsions has led to its postponement several times.
The official said the Government may raise the quantum of oil bonds to be issued to state-run retailers to partly compensate them for selling petrol, diesel, LPG and kerosene below the cost.
Presently, 42.7 per cent of the under-realisation on petrol, diesel, LPG and kerosene is met by the government through issue of oil bonds. This percentage may increase, the official said.
Another 33 per cent is chipped in up upstream companies like ONGC and GAIL, while the remaining has to be borne by the retailers - Indian Oil, Bharat Petroleum and Hindustan Petroleum.
The total under-realisation this fiscal is estimated at around 71,808 crore, he said.
"We wanted a Re one a litre reduction in excise duty on petrol and diesel. But, I don't think that is happening just now," the official said.
The state-run firms lose Rs 10.57 per litre on petrol, Rs 11.56 on diesel, Rs 19.89 on kerosene and Rs 331 on each LPG cylinder.
Last week, a Group of Ministers headed by External Affairs Minister Pranab Mukherjee had left a decision on fuel prices to the Cabinet after the panel was split right in the middle on the issue. Petroleum Minister Murli Deora insisted on a duty cut rather than price hike, while Finance Minister P Chidambaram was opposed to any pre-Budget duty rejig.
Petrol and diesel prices were last raised in June 2006, when crude oil was at 67 dollars a barrel. It is at 92 dollars a barrel this year. LPG prices were last raised by Rs 20 per cylinder in November 2004 when crude was at 34 dollars a barrel. Kerosene prices have not been changed since 2002 when crude was at 23 dollars per barrel.
A Re one per litre increase in petrol price would give Rs 90 crore a month additional revenue to public sector oil companies. A similar hike in diesel would fetch Rs 360 crore a month. A Rs 10 per cylinder increase in LPG prices would result in Rs 58 crore additional revenues every month.