Mr. Jaipal Reddy, Union Minister for Petroleum and Natural Gas, stated that deregulation of diesel rates was not possible with regard to government.

"Let me make it clear, I am in agreement in theory with (Planning Commission Deputy Chairman) Montek Singh Ahluwalia that diesel and other fuel prices should be deregulated but I will request him to examine (such a move) practically and politically," the minister said ruling out decontrol of prices just now.

Mr. Montek Singh Ahluwalia, Planning Commission Deputy Chairman, who is presently in Davos taking part in the World Economic Forum Summit, had declared that he backs up the decontrol of diesel prices.

"We need to align our price with international prices. High petrol prices and low diesel prices is pushing people into buying high quality cars... as a matter of fact, we are subsidizing people who drive Mercedes and BMWs…while the middle class drives smaller cars that run on petrol. Diesel is much worse from an environmental point of view than petrol. But it's a difficult political decision," he said.

To a query on the kerosene subsidy, Mr. Reddy said, "We are in a democracy and not in an autocracy. Whatever is politically feasible to me is sensible. Whatever is not politically feasible is not administratively sensible."

"Political feasibility in deeper sense means providing commodities to the poorer sections of society. We still have the poorer section of the society depending on kerosene," Reddy added.

When asked about petrol, whose rates have been lifted seven times since June last year, comprising `2.50-2.54 per litre increase of this month, Reddy stated that there will be no push back in values, though he did point out there will be no instant increase either.