According to a Reuters report the timing and the quantum of the hike is a political decision," said a government official who declined to be named. "But it should happen. Political discussions are going on." The official said it would come sometime after the current parliament session ends on Saturday.

Oil Marketing Companies are currently (eff. 1-Sep-13) incurring daily under-recovery of Rs 461 crore on the sale of Diesel, PDS Kerosene and Domestic LPG. This is largely as a result of a sharp depreciation in the rupee and accelerating prices of crude globally.

Meanwhile, the Indian crude basket rose to Rs 7392, as on September 5, as against Rs 7145 for the fortnight ending August 31.

A hike in diesel prices is likely to hit consumers hard, given that it would increase the cost of transportation.

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