New Delhi: India is working to end a stalemate with the communist allies over whether to raise domestic fuel prices and is considering various options, oil minister Murli Deora said on Thursday.
Global crude prices have risen about 20 per cent since the start of 2006, but local retail prices, which are government-controlled, have remained frozen due to opposition from the ruling coalition's communist allies.
Deora said he met Finance Minister Palaniappan Chidambaram on Thursday and discussed various options including suggestions made by the communists.
"We are trying to end the stalemate over oil prices. I may meet Prime Minister Manmohan Singh next week," he said.
A senior communist leader told Reuters earlier on Thursday the government should first consider slashing duties on petroleum products before raising prices, which would impose an extra burden on consumers.
"You cannot use the oil sector as a milch cow and put the burden on people. You (the government) consider this (duty changes) and then get back to us," said CPI-M leader Sitaram Yechury.
India imports 70 per cent of its crude and a rise in domestic prices can push up inflation.
The RBI has urged the government to decide how much of the rise in international prices it thinks is permanent and then get on and raise domestic prices accordingly.
A senior finance ministry official, said on Thursday there was no hurry to raise fuel prices and any decision would be balanced.
"There are reasons to be cautious and careful," the official said. "The interest of the common man will be protected. A price shock will be avoided."
He said if lowering of duties on petroleum products resulted in loss of revenue for the government, this would have to be balanced by a cut in government spending.
Analysts say the government has held off raising fuel prices ahead of several state elections in order to avoid making waves with the communists as well as upsetting voters.
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