New Delhi: PetroleumMinister Murli Deora has asked Prime Minister Manmohan Singh for a Re one perlitre excise duty cut on crude oil to enable a reduction in auto fuel prices,necessary to contain the growing inflation.

Deora has written to Singh and Finance Minister P Chidambaram stating that therise in international oil prices this month has seen an erosion of gain ondiesel sales. Oil firms are making a loss of Rs 0.30-0.35 a litre on the saleof this most consumed auto fuel, a top official said.

The hardening of international oil prices, which has seen Indian basket ofcrude rise from 51.74 dollars a barrel in the second fortnight of January to56.18 dollars this month, has also reduced the profit made on petrol from Rs3.50 a litre to less than Rs 2 a litre.

"For a very brief period, oil companies made a profit of about Rs 0.50 alitre on diesel but it has evaporated. There is a loss on diesel sale, leavingno scope of price reduction unless the Government decides to cut exciseduty," the official said.

If Deora's request is heeded, petrol price can be cut by Rs 2 per litre andthat of diesel by Re one per litre, the official added.

The current excise duty on diesel is 8.16 per cent plus Rs 3.32 a litre - thetwo together translating into a total levy of Rs 4.98 per litre. Last year,excise duty on diesel was Rs 3.41 per litre.