The Cabinet Committee on Political Affairs, under the chairmanship of foreign minister Pranab Mukherjee, is meeting on Wednesday to discuss reduction in fuel prices. It may take final decision on much awaited reduction of prices of petroleum products on accounts of decline in crude rates in the international market.

Prices of petrol can be reduced by Rs 4 a litre, diesel by Rs 1 per litre and cooking gas LPG by Rs 25 a cylinder, much lower than expected by transporters and general public of the country.

As per sources close to political circles, "The profit margin in petrol is about Rs 7 a litre and diesel is about Rs 3 a litre. Restoring the duties, about 90 paise Customs duty and Re 1 excise, would further squeeze the margin by about Rs 2 a litre on the two fuels. After providing some cushion to partly subsidies retail sale of cooking gas and kerosene, there may not be much scope for a steep price cut."

The government can also take final decision to lift administrative control over petroleum products. However, deregulation of petroleum products is being opposed by some quarters as it can prove political harmful for Congress party in forthcoming general elections.