New Delhi: The EGoM who met in the capital on Friday decided to free petrol prices from government control.
Petrol price is now expected to go up by Rs 3.75 per litre, reports said.
However, the ministerial panel did not take a decision on decontrolling other fuels, including diesel, kerosene and cooking gas.
The Empowered Group of Ministers headed by Finance Minister Pranab Mukherjee Friday met for the second time in less than three weeks but Railway Minister Mamata Banerjee was absent again.
While Sharad Pawar was part of today`s meeting, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Transport Minister Kamal Nath were absent as they are away on official visit.
Oil Minister Murli Deora, Power Minister Sushilkumar Shinde and DMK leader and Fertiliser Minister M K Alagiri were present.
Sources told earlier that freeing diesel prices was out of the question because the fuel was used by the transport and agriculture sector and, therefore, would have an impact on the already high inflation rate.
With global crude oil trading at below USD 80 a barrel, Deora is seeing this as the last opportunity to usher in reforms in the sector which, otherwise, would need Rs 74,300 crore in doles to bridge the gap between retail prices and import costs.
Freeing of petrol prices would reduce the Rs 74,300-crore deficit by about Rs 5,000 crore. A one rupee per litre hike in diesel prices would cut losses by Rs 3,800-4,000 crore.