State-owned oil companies, which hiked petrol and diesel prices on Saturday, want a steeper price hike.
The Prime Minister's Office, sources say, has firmly rejected a suggestion to close petrol pumps at 8 pm, a proposal that was under consideration according to Oil Minister Veerappa Moily.
On Sunday, he had said an 8 pm curfew was among an omnibus of austerity measures that was being studied. After scathing criticism from the opposition, and a lack of support within the government, Mr Moily today said the proposal was not the government's idea, but was offered "by the public and others."
"If the opposition has any brilliant ideas, let them share them," he charged, in response to the BJP's derision.
The Prime Minister has asked Mr Moily to cut down the spend on oil imports by 25 billion dollars or Rs 1,65, 000 crore. The minister said that a six-week austerity drive, of which the constituents are being finalized, will debut on September 16.
The plan aims at cutting the demand for fuel by 3 per cent at a time when global crude oil prices are surging and the rupee is mining record lows; it has fallen 20% since May
Mr Moily has pointed out in a letter to the PM that unless corrective steps are taken, the government will face losses of Rs 1.8 lakh crore on subsidized fuel.
Every time, the value of rupee to a dollar falls by a rupee, the import bill goes up by 7, 900 crore. For every litre of diesel that's sold, oil companies take a hit of Rs 10.
For kerosene, they lose a whopping Rs 33 per litre.
Mr Moily has also written to the Prime Minister suggesting that India could save $8.5 billion if its increases oil imports from Iran, which is able to accept payment in rupees. The US and the European Union have imposed sanctions on Iran over its nuclear programme, which has reduced its oil exports significantly.
The BJP's Shahnawaz Hussain derided the suggestion to close petrol pumps at 8 pm and said that if the government has run out of ideas, it's welcome to seek suggestions from his party.