The government-appointed Kirit Parikh committee suggested an "immediately" hike prices of diesel by Rs 5 a litre, Rs 4 per litre in kerosene and Rs 250 per cylinder in LPG, reduce annual entitlement of subsidised cooking gas cylinder from six from nine and phase out diesel subsidy in one year to cut a record subsidy burden.
"Economically that is the right decision but how practical is it, how we can apply (it), that is something we have to take a view on it," Moily told reporters here.
The Minister said the suggestions given by the Committee are "very good" as they will help restore fiscal balance.
"If the country has to go forward, reform is a must. But the question is whether we can implement what has been recommended because we have to balance between the consumer (interest) and government revenue. A balance view will be taken on the report," he said.
Diesel is currently sold at Rs 9.9 a litre loss. It could take over one-and-half years to wipe out the Rs 9.9 a litre loss at the current rate of raising diesel price every month by 50 paise per litre.
Moily said the 50 paise a litre hike will continue irrespective of the drubbing that Congress faced in the assembly elections.
"Election results will not drive UPA government or Congress to panic. Congress or UPA will not act in panic. These decisions have been taken in national interest and we will continue to act in best interest of the country and its people," he said.
Without the phased adjustment in rates being effected, the country will not have money to buy raw material (crude oil) and there will be shortages of fuel across the country, he said.
The Parikh committee had recommended that diesel price should be raised by Rs 5 per litre with immediate effect and the balance under-recovery should be wiped out in a year's time.
In the current financial year, diesel under-recoveries or loss have varied from as high as Rs 14.5 per litre in mid-September to as low as Rs 3.5 in May. It is currently at Rs 9.9 a litre.
The total under-recoveries, or revenue loss, on diesel and cooking fuel (LPG and kerosene) could be around Rs 147,500 crore, which could lead to the government exceeding the budgeted Rs 65,000 crore for total fuel subsidy burden for 2013-14 fiscal.