rupee depreciation means it has to pay more for the imports. Last year, it shelled out about USD 170 billion on import of oil.
Moily refused to say if fuel prices will be raised next month but sources in his ministry said that was an option seriously under consideration.
Every one Indian rupee depreciation in the local currency against the dollar adds Rs 8,000 crore to the under-recovery while a one dollar per barrel increase in international prices results in Rs 4,800 crore additional outgo.
The government had in January allowed oil companies to raise diesel rates by up to 50 paise per month until losses on the most-consumed fuel in the country are wiped out.
Oil companies feel a 50 paise hike is insufficient and there should be a higher, one-time increase to cover for the fall in the rupee.
The price of diesel was last increased on August 1, when prices in Delhi went up by 56 paise (including local taxes) to Rs 51.40 per litre.