The issue of fuel prices has put a political pressure on the United Progressive Alliance. The Cabinet Committee on Political Affairs meeting that was scheduled to be held on September 11, 2012 has been postponed.

The Finance and Petroleum ministries have demanded an immediate hike and had pointed out that future economic reforms won’t be possible without lowering subsidies. On the other hand the UPA constituents like the Congress and the Trinamool Congress are against the proposed move.

Jaipal Reddy, the oil minister had earlier said that there would be an increase in diesel, cooking gas and kerosene prices which was unavoidable. But on September 10, 2012 Reddy had circulated an updated version of a note detailing the crisis created by the ride in the crude oil prices.

The fuel price hike was also decided due to the fall in value of rupee against the US dollar. Sources familiar with the development said that Congress President Sonia Gandhi had given the go ahead but was worried about hiking the fuel prices. The Cabinet then deferred that there will not be any fuel price hike for now. The Cabinet was waiting for the Congress president to return from her foreign trip and was likely to discuss the fuel price hike in the meeting.