An Empowered Group of Ministers (EGoM) may meet next week to consider raising petrol and diesel prices by Rs 2-4 per litre and domestic LPG rates by up to Rs 25 per cylinder.

"I was trying for the EGoM meeting on Thursday (June 17) after the usual meeting of the Cabinet. But the meeting could not be fixed for tomorrow because of prior commitments (on part of certain ministers in the group)," petroleum minister Murli Deora said today.

The ministerial panel is now likely to meet next week, possibility on June 24 or 25.

"We are trying for a meeting next week," he said refusing to discuss possible outcome or agenda before the EGoM.

Sources said the EGoM may consider freeing petrol price from government control and possibly giving limited autonomy to state oil firms to price diesel closer to market rates.

Petrol price will go up Rs 3.73 a litre on aligning the domestic prices with international rates. In case of diesel, the proposal is to give oil firms freedom to price the auto fuel only till such time that international crude oil rates stay below USD 90 per barrel.

If accepted, diesel rates will rise by Rs 3.80 per litre immediately.

Sources said domestic retail prices are benchmarked at close to USD 60 per barrel crude oil price while the global rates currently are over USD 74 a barrel.

If the crude climbs to USD 90 per barrel, diesel price in Delhi would have risen by over Rs 7 per liter over the current selling price of Rs 38.10 a litre.

The government would step in if crude oil crosses USD 90 and diesel prices would be moderated either through cut in excise and customs duty or through subsidy from exchequer.

Petrol in Delhi currently costs Rs 47.93 per litre.

There may not be any problem in freeing pricing of petrol, which is considered a fuel used by the well-off, there were doubts on diesel which is used in transport sector and thus has inflationary impact.

In May, WPI-based inflation was 10.16 per cent.

If consensus at the EGoM is against even giving limited freedom to oil companies, then the government may settle for a Rs 2 per litre hike and try to build consensus for freeing the fuel around Budget time in 2011, they said.

Also on the cards is a Rs 25 per cylinder hike in domestic cooking gas (LPG) rates in an effort to align retail prices closer to their cost.

The EGoM headed by finance minister Pranab Mukherjee could not reach a decision at its first meeting on June 7 as key members like railway minister Mamata Banerjee and agriculture minister Sharad Pawar were absent.

"Congress and TDP leaders did not quit their posts in the first place. Now, they want to contest the bypolls and dilute the statehood demand by forcing a contest," Rao charged.

The ruling party leaders indicated that they will go to the people with the slogan that Telangana is possible only with the Congress.

TDP, which has a strong support base in Telangana, is yet to reveal its strategy for the bypolls.