RTRS: UPDATE 1-India panel nod needed for over 2 rupees diesel rise
* Fuel, food inflation on the rise
* Meeting of ministers expected on Dec. 30 (Adds background, prices)
NEW DELHI Dec 23 (Reuters) - Any rise above 2 rupees (4.4 cents) a litre in diesel must be approved by a ministerial panel, India's oil secretary told CNBC TV on Thursday, as government data showed fuel and food inflation continue to rise.
India could decide to raise diesel and cooking gas prices at a ministerial meeting on Dec. 30, a move that could stoke inflation, but would help cushion state oil retailers from rising global crude prices.
India's food price index rose 12.13 percent while the fuel price index climbed 10.74 percent in the year to Dec. 11, data showed. In the prior week, annual food and fuel inflation stood at 9.46 percent and 10.67 percent respectively. [ID:nDEL003800]
"When the empowered group of ministers decided on June 25 that the price of diesel would be market determined there was a caveat saying at that juncture the price would be increased by rupees 2," Oil Secretary S. Sundareshan told CNBC TV channel.
"So any change in that figure will have to go back to the (panel) and that's what we intend to do."
In the June meeting the ministerial panel freed up petrol prices and agreed to deregulate diesel prices at a later date.
With international crude prices hovering near two-year highs, the pressure is mounting for India's government to alleviate the pain its price controls put on state oil companies.
Last week, retailers raised petrol prices -- which were deregulated in June -- by nearly 6 percent.
Diesel -- which costs around 38 rupees per litre in New Delhi -- accounts for one-third of the fuel use by the country's 1.2 billion population and is crucial for transportation and the agricultural sector.
Spiralling onion and tomato prices are now fronting the headlines and the Congress-led government has dropped import duties and banned exports to bring costs down. Onions are virtually indispensable for cooking in India.
The government must pass its budget in the next session of parliament, which starts in February. It struggled to get much business done in the last session because of disruption by opponents calling for probes into a slew of corruption scandals. (Reporting by Krittivas Mukherjee; editing by Malini Menon)
