New Delhi: In a clear move to protect consumers from hardening global oil prices, the Government will announce by June 15 a new pricing policy for petrol, diesel and LPG that may include lower duties and targeted subsidies.

As part of the exercise to finalise the policy, Petroleum Minister Mani Shankar Aiyar, along with Finance Minister P Chidambaram, would meet Prime Minister Manmohan Singh on Friday, June 11.

After a 45-minute meeting with Finance Minister to discuss new pricing strategy, Aiyar told reporters, "We hope by June 15 we will be able to announce a full package".

He, however, did not say what the package would include or what he discussed with Chidambaram.

Sources indicated that the Government was considering extending subsidies on LPG (domestic cooking gas) and kerosene by two years to 2007 after eliminating the rich from the list of consumers of subsidised cooking fuel.

For petrol and diesel, the Government is considering giving freedom to state-run oil firms to fix auto fuel prices on their own within a specified price band.

Also on cards is cutting customs duty on LPG, kerosene and diesel so that the import duty component included in calculating consumer price of these products comes down and consumers to that extent are insulated from spurts in international oil prices. Excise duty on LPG may also be cut.

The Petroleum Ministry, sources said, suggested to the Finance Ministry levy of a specific excise duty on petrol and diesel instead of ad valorem rates. Excise duty in percentage terms meant consumers paid more each time global prices shot up.

Without these measures, oil firms would have to raise petrol prices by Rs 3.53 per litre and diesel by Rs 2.25 per litre to offset nearly 18 per cent increase in global prices of both products.

Sources said in return for relief in duties and extension of subsidy period, oil companies would be told to set up a Crude and Petroleum Product Stabilisation Fund. The monies from the fund would be used to moderate the impact of any abnormal rise or fall in international prices.

Aiyar said, "I had a fruitful and a very constructive meeting with the Finance Minister and there is a consensus on our approach to deal with the crisis (created by spurt in crude oil prices)."