On Monday March 19 Finance Minister Pranab Mukherjee had indicated at a rise in diesel and cooking gas prices subsequent to the budget session of Parliament, saying this would be built after the session through political consent.

As Pranab Mukherjee told reporters that subsequent to the Budget session of Parliament is over, I must to talk over with many state governments, Chief Ministers, leaders of political parties and try to solve an complete mechanism over which we will be to deal some of the very important issues for which the combined support of all participants are called for.

He was replying to a query on what steps are being taken to contain fuel subsidy following hardening global oil prices.

The government had decontrolled petrol price in June 2010, diesel and domestic LPG are sold at highly subsidised prices.

But even petrol price have not moved in tandem with cost with state oil firms losing over Rs. 5 a litre because of a informal moratorium imposed in view of assembly polls. They currently lose Rs. 14.73 a litre on diesel, Rs. 30.10 a litre on kerosene and Rs. 439.50 per LPG cylinder.

Mukherjee said his government is working on methods to deal with the problem of rising crude prices and a decision would be taken in consultation with all the participants.

High subsidies are putting pressure on the country's fiscal deficit, which is likely to touch 5.9 per cent of the GDP this fiscal and 5.1 per cent in 2012-13.

An increase in fuel prices is necessary to cut down government's subsidy payout as state-owned oil firms are projected to lose Rs. 200,000 crore on selling fuel below cost next fiscal. As per present policy, the government will have to make good half of it by way of cash subsidy.

In the current financial year fiscal, government has given a fuel subsidy of 65,000 crore, and it hopes to cut down to Rs.40,000 crore in 2012-2013.As government's aim is to reduce the subsidy bill to below 2 per cent of Gross Domestic Product in the Financial year 2013.