* Need for LPG price revision - India oil secretary * Panel meeting previously scheduled for Dec 22 deferred (Adds details, background) By Nidhi Verma NEW DELHI, Dec 21 (Reuters) - India could decide to raise diesel and cooking gas prices at a ministerial meeting, which is expected by end-December, a move that could stoke inflation but would help cushion oil retailers from rising global crude prices. Indian oil firms last week raised petroleum prices -- already deregulated -- by about 5.6 percent as crude oil hovers near two-year highs, and the government is widely expected to allow diesel and cooking gas prices to increase. "We certainly see a need for LPG (liquefied petroleum gas) price revision because the recommendation (of a government-appointed panel) was to raise prices by 100 rupees and the prices were increased by only 35 rupees," said Oil Secretary S. Sundareshan. Oil marketing companies' revenue loss on fuel sales in the current fiscal year is estimated at 660 billion rupees ($14.6 billion), Sundareshan said on Tuesday. The increase in diesel and LPG prices would help the oil firms protect their margins as international crude oil prices are close to $90 a barrel. Sundareshan also confirmed the meeting of the ministerial panel -- which can make decisions without referral to cabinet -- had been deferred from an earlier scheduled date of Dec 22. He said there was a need to raise cooking gas and diesel prices as oil companies are currently suffering a revenue loss of 275 rupees on sale of a 14.2 kg cooking gas cylinder and 6.50 rupees on a litre of diesel. Analysts say while the government is keen to ease its oil subsidy burden, lifting diesel and LPG prices after a hike in petrol prices would raise headline inflation INWPI=ECI, which eased to 7.48 percent in November, its lowest in a year. Raising diesel prices is a political hot potato in India as it accounts for a third of the country's fuel demand. Deregulation of petrol prices in June sparked off political protests against the Congress-led coalition government. Diesel and gasoline have a weighting of 4.67 percent and 1.09 percent, respectively, in the wholesale price index (WPI), India's main inflation measure, and raising fuel prices has a knock-on effect as farmers and manufacturers pass costs along. LPG carries a weighting of 0.91 percent. The increase in petrol prices and a 2-rupee rise in diesel would lift WPI inflation by 6 and 24 basis points, respectively, with a cascading effect of the same degree over three or four months, Morgan Stanley economist Chetan Ahya wrote last week. ($1=45.2 rupees) (Writing by Manoj Kumar; editing by Aradhana Aravindan)

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