The government, said Information Technology Minister Pramod Mahajan while addressing a press conference here on Wednesday, will be closely watching the oil prices in the international market.

Mr Mahajan further said that the prime minister will be leaving for Mumbai on October 8 or 9 for the knee operation. He will take about two weeks to recover. Mr Vajpayee, he said ``will take a second look on the petroleum tariff after he returns from Mumbai.'' The cabinet was earlier proposing to consider the rollback of oil prices on Friday.

Trinamool Congress leader Ms Banerjee, along with Ajit Panja, had resigned from the Union cabinet demanding a rollback in the increased oil prices which was announced on September 30. The prime minister, however, had refused to accept the resignations.

According to Mr Mahajan, Mr Vajpayee asked Ms Banerjee to ``continue to discharge her duties and not to press for resignation.''

Earlier in the day, Petroleum Minister Ram Naik had met Mr Vajpayee to express his opposition to any rollback in prices of diesel, LPG and kerosene.

Mr Naik is believed to be unhappy over the sudden softening of the government's stand on the issue of rollback in prices following the resignations of Ms Banerjee and Mr Panja.

After his meeting with Mr Vajpayee, an apparently disappointed Mr Naik told The Financial Express: ``I have once again stressed that no rollback in the petro prices should be carried out at this stage,'' adding that a final decision will be taken by the prime minister as ``I can only offer him my advice over the implications of a rollback.'' The Union cabinet is expected to approve a rollback in prices of diesel, LPG and kerosene on Friday. Mr Naik, who was hoping to mop up Rs 8,000 crore in the next six months from the recent hike announced in the prices of petroleum products, will have to forego a big chunk if the government bows to Trinamul Congress demands. This will put additional burden on the oil pool deficit, estimated to cross Rs 23,600 crore by March 2001.