New Delhi, May 28: The Finance Ministry on Wednesday dismissed the reports that suggested that the government is planning to levy a cess or surcharge on Income Tax and Corporate Tax to bail out oil firms suffering due to the surge in crude oil prices.

In a press statement released by the ministry, it said that the Centre never considered the move and added that the media was responsible for spreading false reports.

The new proposal follows Finance Minister P Chidambaram`s reluctance to cut duties on crude oil and petroleum products unless alternate source of revenues are identified. However, the cabinet will be meeting tomorrow to decide on the issue.

Petroleum Minister Murli Deora met Chidambaram on Tuesday but failed to convince him of the urgency to cut import and excise duties to avoid the Rs 2,00,000 crore revenue loss expected on petrol, diesel, domestic LPG and kerosene this fiscal.

BPCL and HPCL have cash to buy crude oil only till July while Indian Oil can finance imports till September. The three firms face huge liquidity crisis as they are unable to realise full value of products sold.

Sources said a cess or surcharge like the one levied after the Kargil war, may be imposed on income and corporate tax to make up for the cut in customs duty on crude oil to zero from 5 percent and an excise duty cut on petrol and diesel.

Petroleum Ministry is proposing to raise petrol price by Rs 10 a litre, diesel by Rs 5 per litre and that of LPG by Rs 50 per cylinder cut the Rs 580 crore per day loss made by the three oil firms by one-third.