Tuesday, February 14 2006 16:11 Hrs (IST) - World Time -

New Delhi: Ahead of the Budget, Government today (Feb 14,2006) said it is looking at ways to rationalise domestic prices of petroleum products to offset the adverse impact of global crude prices that experts feel will continue to rule high next fiscal.

"Government is fully seized of how to rationalize petroleum prices," Chief Economic Advisor Ashok Lahiri said at a conference on Eneregy Security here.

He said the Rangarajan committee was looking at ways of rationalising the prices of petroleum products.

Lahiri declined to comment on whether Rangarajan panel's recommendations would be incorporated in the next Budget.

With global crude prices expected to remain high, there was a strong indication that duties on petroleum products would be revised in the budget to minimise the impact of a possible hike in domestic petrol and diesel prices.

Kerosene and cooking gas LPG prices are likely to remain unchanged, going by the promise of the UPA Government.

Expressing concern over high crude prices, he said, "Of course, it will affect us as it will increase the price of inputs. Price of export items will also rise."

The concern comes in the wake of rise in the reference price of Indian crude oil basket from US$ 36.3 in April-September 2004 to USD 53.7 in the first half of 2005-06.

Forward contract prices of global crude continued to be high while the refining margins of Indian oil companies were also high, Lahiri said.

Ashok Dhar of Observer Research Foundation said the Indian basket would hover at US$ 58 a barrel next fiscal assuming Brent prices at US$ 60 and Dubai crude at US$ 57.