The Petroleum and Natural Gas Minister is considering Rs 4.50 hike in diesel price and Rs 100 hike in LPG.
The Cabinet is likely to take up the suggestions of the Kelkar Committee report on diesel pricing.
Chidambaram said that fiscal consolidation will help in moving to a regime of low inflation and high growth.
The panel warned that India was on the edge of a 'fiscal precipice' and if steps were not taken soon, the economy would be hit.
The Kelkar panel has recommended a hike of Rs 2/lt in kerosene price and an increase of Rs 50 per LPG cylinder immediately.
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