In the wake of hiked petroleum prices, the Confederation of Indian Industry on Wednesday said the government and industry must cut annual oil imports by 10 per cent by 2010.

"Initiatives for alternate fuel usage like wind energy and solar power need to be taken and there should be extensive campaigns to promote oil conservation in small- and medium-sized industries and domestic sector," said CII director-general Chandrajit Banerjee.

• Inflation, the silent killer

A marginal increase in the inflation rate due to a hike in crude oil prices is inevitable, the industry chambers said, adding that the government needs to be cautious and ensure that curbs aimed at lowering inflation should not end up hurting industrial growth.

The PHD Chamber of Commerce and Industry said the government should have used the opportunity to end cross subsidisation of kerosene as well. "The poor can be subsidised directly though income coupons or food stamps," it said.

The Federation of Indian Chambers of Commerce and Industry said sharing of the burden of rising oil prices by different stakeholders will ensure that the direct impact on consumers is contained.