Virtually securing the consent of Left parties, the government is likely to decide next week on a price hike of Rs 4 per litre for petrol and Rs 3 a litre for diesel while sparing cooking gas and kerosene.
The appointment of this former envoy to China assumes significance in view of preparations being made to address border issues ahead of Chinese Premier Wen Jiabao's visit to India next month.
The government on Wednesday mandated the petroleum ministry to hold dialogue with Pakistan, Bangladesh, Iran and Myanmar to secure natural gas supplies through pipelines to meet demand of the country.
The Directorate General of Hydrocarbons Chief V K Sibal, whose appointment on the ONGC board has triggered a controversy, on Monday said ONGC chairman Subir Raha's non-acceptance of his appointment amounted to "gross indiscipline."
If Raha's resistance to the petroleum ministry's interference turns into a plebiscite at the firm's AGM on Sept 21, the ministry may vote for his ouster.
Petroleum Minister Murli Deora will meet Finance Minister P Chidambaram on Monday to work out a package on pricing of petrol and diesel, besides subsidies on kerosene and cooking gas before the month-end.
The hike in prices of petrol and diesel seems to have been put on the backburner with the price of the basket of crude oil that Indian refiners
The government is reviewing the previous NDA regime's ambitious programme to run automobiles on ethanol-doped petrol, a project which was launched to cut the country's dependence on imported crude oil.
Reliance Natural Resources Ltd chairman Anil Ambani is understood to have sought a review of the government's decision, rejecting the sale of natural gas by RIL to it.
Finance Minister P Chidambaram and Petroleum Minister Mani Shankar Aiyar may soon meet Prime Minister Manmohan Singh to decide on fuel pricing in the wake of spiraling international oil prices.
The bonds will help oil marketing companies - IOC, HPCl, Bharat Petroleum and IBP Ltd - to cover their under-recoveries.
The government is likely to decide this week on a hike of Rs 2 to Rs 3 a litre in the prices of petrol and diesel, but spare kerosene and cooking gas prices from any increase.
Reliance Natural Resources Ltd has questioned oil ministry's right to approve the price at which a producer sells gas to customers, saying its nod was needed only for the formula or basis of pricing of gas for computing government's share.
The Prime Minister's office is understood to have declined an extension to Subir Raha, the high profile chairman of Oil and Natural Gas Corporation.
The petroleum ministry has said that fuel prices should go up by Rs 10.43 a litre and cooking gas price by Rs 114.45 per cylinder, with the Left parties opposing the move.
India's oil import bill has swelled 52 per cent to $44.64 billion in 2005-06 on the back of high global oil prices.
Officers of oil PSUs have threatened to go on an indefinite strike from May 31 if their demand for higher wages are not met.
The government cleared the proposal despite opposition from the petroleum ministry, which says this is not the right time for divestment as the sector is moving from trade parity to export parity pricing.
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