The Petroleum Secretary, M.S. Srinivasan said on Wednesday that India is all set to increase retail fuel prices by next month (Feb 2008).

Mr. Srinivasan also said that a moderate increase in prices was likely that could speed up inflation.

India did not increase domestic fuel prices during last year (2007) even though the world fuel prices rose by more than half.

Mr. Srinivasan told, “The GoM (Group of Ministers) on food is meeting on eighth (January) and very soon after that there will be a meeting on fuel prices.”

“Then, the recommendations will go to the cabinet (for its approval). So expect a moderate hike in petrol, diesel prices in the first week of February,” he added.

In mid-December (2007), India’s wholesale price index climbed up 3.45% as compared to the year 2006, inching up from a five-year low of 2.97% in late October.

Inflation also hit a two-year record of 6.69% in January, but toned down after RBI tightened up policy and the administration cut duties on various items to cool prices.

The Prime Minister, Dr. Manmohan Singh, has formed a group of federal ministers (GOM), led by the External Affairs Minister Pranab Mukherjee, to take a look at commodity pricing in mid-November.

The GoM is likely to meet later this month followed by a Cabinet meeting.

Sources near to the Congress party, said a rise of Rs 4 in petrol and Rs 2 in diesel was being considered.