The government is likely to cut petrol and diesel prices by Rs 4 and Re 1 a litre, respectively, on Wednesday.
The Cabinet Committee for Economic Affairs is expected to meet on Wednesday evening to take this decision, given the cheap crude prices in the global market.
The government had last cut petrol prices on December by Rs 5, and diesel rates by Rs 2 a litre.
Crude oil had subsequently climbed to a record high of $147 a barrel in July, but has since come to $40 a barrel level.
The petroleum ministry is pushing for a cut in cooking gas prices, but oil companies are opposed to the idea, official sources said.Petroleum minister Murli Deora called on external affairs minister Pranab Mukherjee to discuss the pricing issue ahead of an expected meeting of the Cabinet Committee on Political Affairs on Wednesday evening.
Mukherjee would chair the CCPA meeting in the absence of Prime Minister Manmohan Singh, who is recuperating from a by-pass heart surgery.
Oil companies currently earn a profit of Rs 9.86 on sale of a litre of petrol and Rs 3.84 on every litre of diesel, while they incur a loss of Rs 12.16 on every litre of kerosene and Rs 32.97 on a LPG cylinder.
Crude oil prices were trading higher at $42.25 a barrel in the New York Mercantile Exchange after gains in the bourses on higher-than-expected corporate earnings, but were way cheaper than the $147 per barrel recorded in July 2008.
The Indian government had last cut petrol and diesel prices on December 6 by Rs 5 and Rs 2 a litre, respectively.
The move had then helped arrest inflation, which in turn helped authorities foster easy money policy to prop up economic growth.
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