The oil ministry has made a proposal to cabinet to raise diesel prices and increase the number of subsidised cylinders available to households to nine a year from the current cap of six, two oil ministry sources said on Wednesday.

"We have moved the cabinet note last week. It has a number of combinations including the ... recommendation of raising diesel prices by one rupee per month for 10 months," one of the sources said.

The other source said the government would also consider raising the cap on LPG cylinders from six to nine.

"The Cabinet proposal has been moved but it is not listed for tomorrow's meeting," he said.

India, which imports more than 80 percent of its fuel needs, liberalised petrol prices in June 2010 but continues to regulate diesel prices to protect the poor.

Prime Minister Manmohan Singh has recently said the country must gradually bring local fuel prices in line with global prices.