PM alarmed by rise in crude prices

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Prime Minister Manmohan Singh expressed concern at the rise in international oil prices and said that all possible options, including a fuel price hike and duty cuts, will be considered to deal with the situation.

"We have to look at all possibilities existing. I would not like to comment on it," he told reporters when asked if petrol and diesel prices are set to be raised.

"Steep rise in crude oil prices is a cause of concern. We have to look at various options open to us," he said after new CAG Vinod Rai took oath of office at Rashtrapati Bhawan.

A Group of Ministers on fuel prices headed by External Affairs Minister Pranab Mukherjee will meet on January 17, the first ever meeting after its constitution by the Prime Minister in November 2007, to consider a response to crude prices touching USD 100 a barrel.

The crude prices have since fallen back, but is a cause of worry to India, which meets three-fourth of its demand through imports.

With state retailers Indian Oil, Bharat Petroleum and Hindustan Petroleum together losing Rs 340 crore every day on sale of petrol, diesel, domestic LPG and PDS kerosene at prices below the imported cost, a hike in fuel prices and a cut in excise duty are being mooted as options.

Petroleum Minister Murli Deora said the GoM on fuel prices will meet on January 17 to consider all 'options' but refused to elaborate.