Will take corrective steps to deal with oil prices: FM

Finance Minister Pranab Mukherjee today said the government will take "corrective decision" in consultation with all stakeholders to deal with the impact of rising crude oil prices on public finances and subsidy bill.

"The important question is can a country afford to import 100-120 million tonnes of crude if the prices [don't come] down to a reasonable level. That very question is looming large, staring at our face and we shall have to collectively address this issues," he said replying to queries related to fiscal deficit and fuel subsidy by industry leaders here.

Crude oil prices have been rising due to geo-political reasons, including the Iran situation. The prices had touched a high of $125 a barrel earlier this month.

"There are various suggestions, we are working on it. We shall have to address these issues ...I would like to involve all the stakeholders, bring them on broad to take the corrective decision," he added.

The government has refrained from increasing prices of diesel, kerosene and cooking gas despite global crude oil prices witnessing a sharp rise.

Petrol prices were de-regulated in 2010 but the government is yet to take a decision on freeing diesel prices.

High subsidies are putting pressure on the country's fiscal deficit, which is likely to touch 5.9% of the GDP this fiscal and 5.1% in 2012-13.

The government targets to bring down the subsidy bill to below 2% of GDP in the next fiscal and 1.75% in the subsequent years. The government has made a provision of Rs 40,000 crore towards fuel subsidy.