<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[<p>India will raise retail prices of subsidised fuels, including diesel, once parliament approves the finance bill for the current fiscal year early next month, a senior government source with knowledge of the matter said on Thursday.<br><br>Parliament is expected to consider the finance bill on May 7 and approve it a couple of days after that.<br><br>"The government's credibility on fiscal consolidation is at stake. After crude prices remaining over $120 a barrel, hike in oil (fuel) prices is certain," the source, who did not wish to be named because of the sensitivity of the issue, told Reuters.<br><br>"We cannot do without it. Once the finance bill is approved, oil prices including diesel would be raised," he said.<br><br>Finance Minister Pranab Mukherjee has vowed to raise fuel prices as soon as possible to tackle a rising subsidy burden and large deficits, but the move is politically fraught for the weak coalition government, already under fire over high inflation.<br><br>Diesel prices were last raised in July and the government has still not fulfilled a promise to fully liberalize the market. It was expected to raise prices earlier this year.<br><br>India imports about 80 percent of its crude oil needs. Rising global prices increases its import bill and widens the trade and current account deficits.<br><br>In theory, India allows state fuel retailers to fix petrol prices to market rates but continues to cap prices of other fuels at a lower rate to rein in inflation and protect the poor.<br><br>However, the state fuel retailers - Indian Oil Corp <IOC.NS>, Bharat Petroleum Corp <BPCL.NS> and Hindustan Petroleum Corp <HPCL.NS> - have not raised prices of petrol since December in line with global trends due to an unofficial dictat from the government.<br><br>Any price rise will help curb rampant diesel use, which has increased as the market-driven price of alternatives like fuel oil have jumped. Diesel now accounts for a third of local fuel use.<br><br>The source indicated gasoline prices could be raised around the same time as diesel.<br><br>Softening inflation, currently at about 7 percent, also strengthens a case for a hike in fuel prices.<br><br>The government will not reverse a hike in gold import duty to 4 percent from earlier 2 percent, introduced in March, the source said, adding it may abolish an excise duty levied on non-branded jewellery.<br><br>Jewellery traders across the country went on strike last month protesting against the duties. The industry called off the strike after it said the finance minister promised to reconsider.<br><br>(Reuters)</p>