An empowered Group of Ministers (EGoM) will meet here on Friday and is likely to consider freeing petrol prices from government control, official sources said.
Petrol price will go up Rs 3.73 a litre if the domestic prices are aligned with international rates.
The sources said domestic retail prices are benchmarked at close to $60 per barrel crude oil price while the global rates currently are over $77 a barrel.
Petroleum Minister Murli Deora has already asked states to lower sales tax on petrol and diesel to cushion consumers from the impact of fuel price hike, if any.
"A rise in the international oil prices exerts an upward pressure on domestic prices of petroleum products," he wrote to states.
"Ad valorem rates of VAT imposed by the state government further aggravates the impact of international oil prices on the consumers."
