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Cabinet call on fuel price hike next week

New Delhi, Sept. 2: The cabinet will take a decision on raising the prices of petrol, diesel and LPG next week.

While fuel prices are expected to rise by Rs 2-3 per litre, cooking gas could become dearer by Rs 20 per cylinder.

“A cabinet meeting is scheduled early next week to consider the increase in prices of petroleum products,” petroleum minister Mani Shankar Aiyar said from Oslo.

Today’s cabinet meeting, chaired by Prime Minister Manmohan Singh, is reported to have discussed the issue but a final decision will be taken when the petroleum minister returns from his tour of Norway, Iceland and Bangladesh on September 7.

The government appears to have veered around to the view that there is no alternative but to raise prices in view of the spiralling international crude costs.

At a late night meeting yesterday, Prime Minister Manmohan Singh had reviewed the pressure that boiling oil prices were putting on the economy and the public sector oil firms.

The oil companies have informed the petroleum ministry that petrol is now being under-priced by Rs 7.45 a litre and diesel by Rs 5.15 per litre. LPG was being sold at a loss of Rs 96 per cylinder and kerosene was Rs 12.85 a litre below its actual cost.

The average price of the Indian basket of crude imports, which was $39.21 per barrel in 2004-05, touched a high of $62.50 a barrel on Wednesday.

ONGC deal

ONGC has signed a memorandum of understanding with Norsk Hydro of Norway to co-operate in oil exploration ventures in West Asia. Another agreement for a joint venture for oil exploration in the deep sea areas of Cuba is being finalised. Aiyar said India and Norway would jointly explore oil and gas finds in the Barent's Sea.

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