New Delhi, May 22: The Cabinet headed by Prime Minister Manmohan Singh may meet tomorrow to consider raising petrol and diesel prices among other measures to bailout state run firms that have been reeling under unprecedented high crude prices.

With Indian Oil, Hindustan Petroleum and Bharat Petroleum projected to lose Rs 200,000 crore in revenues on sale of petrol, diesel, domestic LPG and kerosene below import cost, industry sources said a hike in the range of Rs 2 to 5 per litre appears on the cards.

Petroleum Minister Murli Deora on his part neither denied nor confirmed Cabinet being scheduled for tomorrow.

"We are discussing all possible measures to help and protect our public sector oil companies... Some remedial measures need to be taken (urgently)," he told reporters.

The three firms are currently losing Rs 450 crore in revenues on fuel sales every day. Petrol is being sold at a loss of Rs 16.34 a litre, diesel at Rs 23.49 per litre, LPG at Rs 305.90 per cylinder loss and kerosene at a discount of Rs 28.72 per litre.

Deora has called a meeting of heads of the oil PSUs tomorrow morning and after that may brief the Cabinet of the financial strain on the companies in view of international crude prices topping 135 dollars a barrel.

"I cannot rule in or rule out anything at this stage," Deora said when asked if petrol and diesel prices hike was an option under consideration.

"We are concerned at the financial health of the PSUs," he said, but asked the consumers not to panic.

"There is no rationing of fuel as has been reported by one newspaper. We can never resort to such an anti-consumer practice. I have spoken to BPCL Chairman Ashok Sinha who has categorically denied such a move," he said.

Deora said state-run retailers IOC, BPCL and HPCL were under severe financial strain and may have taken some measures to cut cost but fuel rationing was not being resorted to.

"I would like to plead with the public and consumers that there is no such move," he said. "Government is at work trying to solve the problems being faced by PSUs. There are some measures that are under discussions."

"Our PSUs have done great service to the nation. Besides making available auto and cooking fuel to every nook and cranny, they have also been selling at a price lower than the cost. This has caused some constraint and we are concerned about it," he said.

Essar offers fuel to wipe out deficit

New Delhi May 22:

Essar Oil Ltd, India's newest refiner, has offered to wipe out most of the fuel deficit in the country by supplying the entire output from its Vadinar refinery, where production has been raised to 12.5 million tonnes.

Effective May, thruput at Essar's Vadinar refinery in Gujarat has been raised to 12.5 million tonnes a year from 10.5 million tons earlier, company Managing Director Naresh Nayyar wrote to Petroleum Secretary M S Srinivasan on May 5.

Though India is surplus in refining capacity, it is short in LPG and kerosene production. This year, it may even have to import diesel due to double digit demand growth. Currently, Essar supplies all of the 0.47 million tonnes of LPG, 0.65 million tonnes of kerosene, 4.44 million tonnes of diesel and most of 1.95 million tonnes of petrol to state-run Indian Oil, Bharat Petroleum and Hindustan Petroleum.