Prices of petrol and diesel hit fresh highs, continuing past 11 days' rally. Petrol prices are Rs 77.47/litre and Rs 85.29/litre in Delhi and Mumbai, respectively, while that of diesel are at Rs 68.53/litre and Rs 72.96/litre in both the cities.
The 10-day relentless price increases built pressure on the government for cutting excise duty to give immediate relief to consumers. However, after a meeting of the Union Cabinet headed by Prime Minister Narendra Modi, Law and IT Minister Ravi Shankar Prasad offered little insight if a reduction in tax was coming.
"(The) issue of frequent hike in fuel price is a matter of debate and concern. The government is involved in this whole process, including the concern (about rise in prices) and also the uncertainty," he told reporters here.
With geopolitical situation leading to an uncertainty over the direction of international oil prices, "a new sense of urgency has developed", he said.
"The government is keen that instead of having an ad hoc measure, it may be desirable to have a long-term view which addresses not only the volatility but also takes care of the unnecessary ambiguity arising out of frequent ups and downs. That process is underway," he said.
Supply concerns in Iran and Venezuela following new US sanctions had pushed both Brent and WTI to multi-year highs, with Brent breaking through a $80 threshold last week for the first time since November 2014.
The minister refused to elaborate either on the measures being considered or if a duty reduction was on cards.
On the question of excise duty, he said proceeds from such taxes are used for country's development including building of highways, digital infrastructure, electricity to villages, hospitals and education.
"So tax on fuel is linked with developmental issues. We understand that there is a compelling need for a long-term solution, structured solution (to deal with the present situation)," he said.
Asked about former Finance Minister P. Chidambaram's criticism of the BJP government raising excise duty to take away gains arising from falling international prices, Prasad said he generally does not comment on the Congress leader's tweets "because ever since his party went out of power, he has become active on twitter".
"But I want to tell my media friends that they should tweet to Chidambaram and ask if his mathematics was so strong then how did his government go out of power," he asked.
Chidambaram had in a series of tweets said that the fall in international oil prices between 2014 and early 2016 helped the government save Rs 15 per litre but the government put an additional Rs 10 on every litre of fuel.
The BJP-led government had in June last year junked a 15-year-old practice of revising rates every fortnight and introduced daily revisions which worked well except periods immediately preceding an election.
There was a 19-day freeze in revising rates before Karnataka went to polls, and since the time the hiatus ended on May 14, rates have gone up by Rs 2.54 a litre in case of petrol and Rs 2.41 in diesel.