THE central government does not seem in a hurry to increase the prices of

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diesel and domestic cooking gas.

Oil minister Murli Deora said on Wednesday that the government is trying not to increase the price of petroleum products. "This is being discussed. The eGoM meeting was postponed and will be discussed in the next meeting. It is not good to have an eGoM meeting right now when already prices are too high. We will wait for some more time now," Deora told reporters here.

The government freed petrol prices in June last year. However, prices of three other petroleum products ­ diesel, kerosene and domestic cooking gas ­ are regulated by the centre to save commoners from high prices.

The government is already busy finding ways to tackle food prices. Increase in diesel and cooking gas prices will push inflation further.

Food inflation touched a 10-week high of 14.44 per cent for the week ended December 18. Finance minister Pranab Mukherjee had earlier indicated that inflation would be at 6 per cent by December. However Mukherjee has now pegged overall inflation at 6.5 per cent by March 2011.

State-run oil marketing companies ­ IOC, HPCL and BPCL--are incurring a loss of close to Rs 7 on every litre of diesel sold in retail market. Also, there is a gap of Rs 19.60 per litre on kerosene and Rs 366 on every 14.2 kg domestic cooking gas cylinder. Total under-recovery of oil companies is likely to cross Rs 71,000 crore from Rs 65,000 crore expected earlier.

"In 2008, when crude oil shot up to $ 147 per barrel, we insulated the commoners and provided for Rs 103,000 crore from the budget to subsidise fuel," Deora said. Global crude oil price has rallied to $ 90 per barrel and have crossed 27-months high of $ 92.58 per barrel last Monday.

Crude oil price will cross over $100 per barrel in the near future, Kotak Securities said on Wednesday. The crude showing a northward move is mainly on account of steady global economic recovery, severity of winter in Europe and North America, gush of liquidity due to two rounds of quantitative easing undertaken by the US Federal Reserve, rising demand from Asian economies such as China and India and dollar depreciation, Sumit Pokharna ofKotak Securities said in its report.