New Delhi: The Union Cabinet today (Oct 27, 2004) deferred a decision on raising petrol and diesel prices by Rs 1.60 per litre and Rs 0.65 a litre respectively even as Oil Minister Mani Shankar Aiyar plans to discuss the issue with the Left parties this week.

The Petroleum Ministry had proposed to raise petrol and diesel prices and cut duties on crude oil and products to contain the impact of surge in crude oil prices but with Aiyar leaving for Srinagar to attend a roundtable on Panchayati Raj, the decision was deferred.

The issue is likely to come up again before October 31, the next date due for revising petrol and diesel prices.

The Finance Minister P Chidambaram said, The Cabinet Committee on Economic Affairs (CCEA) has deferred the decision on a package on pricing and distribution of sensitive petroleum products as the Petroleum Minister was not present."

The Petroleum Ministry had suggested raising petrol and diesel prices within a limited price band while halving the customs duty on crude oil to 5 per cent and slashing import duty on petrol and diesel to 15 per cent from 20 per cent.

However, the Finance Ministry is opposed to any further duty cuts and in all probability price hike may only be the answer to crude prices touching a historic high of $ 56 a barrel.

Before leaving for Srinagar, Aiyar told sources that he would seek to work out a consensus on raising petrol and diesel prices with the Left parties on Friday (Oct 29, 2004) or Saturday (Oct 30, 2004).

Aiyar last week held discussions with the CPI (Communist Party of India) leaders A B Bardhan and D Raja and also spoke on phone with Sitaram Yechuri of CPM (Communist Party Marxist).