Petrol prices can be hikes by Rs. 5 per litre as early as today, sources familiar with the developments in the Cabinet Secretariat revealed.

Citing unnamed sources from the Cabinet Secretariat, various media outfits, including NDTV, are reporting that the cabinet could approve an increase of Rs. 5 in the prices of petrol. The sources also told that the Cabinet could also approve increases of up to Rs. 5 per litre in the prices of diesel and Rs. 50-100 in the prices of LPG.

The news surfaced two days after the petroleum & natural gas ministry sent a letter to the Cabinet listing various options for hikes in the prices of petroleum products.

Imminent hikes in the prices of the petroleum products are widely expected as state-owned oil & gas marketing companies are suffering loss of Rs. 550 crore per day on account of higher crude prices in the world markets.

State-run oil companies are presently suffering loss of Rs. 1.37 per litre on petrol, and Rs. 17 per litre and Rs. 32.7 per litre on diesel and kerosene respectively. The loss on every cylinder is pegged at Rs. 347.

In the current fiscal, the oil firms are estimated to lose a whopping Rs. 200,000 crore due to selling the fuels below cost. According to existing policy, the government will have to bear half of that loss by way of cash subsidies.