Oil Min moves Cabinet note on raising diesel, LPG prices

The ministry's proposal to the Cabinet Committee on Political Affairs (CCPA) also includes barring households with income of more than Rs 50,000 per month or Rs 6 lakh in a year from getting subsidised LPG cylinders.

The Cabinet committee is likely to consider the hike at the first occasion it meets after the current monsoon session of Parliament ends on Friday, a top Oil Ministry official said here today.

Also on cards is an increase in petrol price on which the state-owned oil firms, despite having freedom to raise rates, are losing close to Rs 6 per litre.

The price hike may take place anytime after Friday.

"The situation facing us is very grim. We can no longer afford to postpone a price hike," the official said.

"We have not recommended the quantum of increase in rates but have analysed the situation that warrants an immediate price rise," he added.

Diesel, domestic LPG and PDS kerosene rates have not been changed since June 2011 even though cost of production has soared 28 per cent.

Oil PSUs are losing Rs 560 crore per day on sale of diesel and cooking fuel at present, and are forced to resort to short-term borrowings to meet funds needed for importing crude oil (raw material for making fuel).