New Delhi: Finance Ministry is believed to have rejected Petroleum Ministry's proposal for duty cuts to avert any immediate price increase of petroleum products following steep rise in global crude oil prices.

"The Finance Ministry does not want to tinker with its resource mobilisation in 2002- 03," Petroleum Ministry sources said.

In the absence of any cut in excise duty or upward revision in the price of petrol or diesel, national oil companies could suffer a loss of as much as Rs 1000 crore during the three month period ending June.

Global crude oil prices have breached $ 27 a barrel in April from the $ 19.5-20 a barrel planned in the Union Budget for 2002-03.

"Till oil PSUs are willing to absorb the impact of rise in crude oil prices, the Finance Ministry will not affect any duty changes," sources said while pointing out that oil refining and marketing companies, Indian Oil, Hindustan Petroleum and Bharat Petroleum have, on the advise of Petroleum Minister Ram Naik, decided not to increase price of petroleum products for a transitionary period of 2-3 months.

The average price of Indian basket of crude since the presentation of the Budget on February 28, is $ 23.33 per barrel, sources said.

With every $ 1 increase in crude prices, petrol should be dearer by 55 paise per litre while diesel prices should rise by 45 paise.

The $ 7 per barrel increase in crude oil prices would burden the oil companies by about Rs 1200 crore, sources added.

PTI