New Delhi: The Empowered Group of Ministers has approved market-driven hike in petrol prices on Friday. While petrol prices will go up by Rs 3.50 per litre, diesel by Rs 2 per litre and kerosene Rs 3 per litre, LPG is costlier by Rs 35 per cylinder. However, the ministerial panel decided to control the LPG price while diesel prices will be market-driven later. Oil Minister Murli Deora's proposal could have triggerred a price hike of Rs 3.73 per litre on petrol and Rs 3.80 per litre on diesel.

A proposed price hike of Rs 25 per cylinder for LPG was also on the cards. The government is all set for the tough decision as it also faces opposition from key allies like the NCP and the Trinamool Congress. Trinamool leader and Railway Minister Mamata Banerjee called on Finance Minister Pranab Mukherjee late Thursday, apparently to discuss the contentious issue of increasing petrol and diesel prices. Banerjee is believed to have expressed her reservations on raising fuel prices at a time when food prices are already ruling high.

Sources had said that with DMK leader and Fertilizer Minister M K Alagiri on board, the EGoM may push for freeing petrol prices, a move that will see rates in Delhi rising by Rs 3.73 a litre. Petrol in Delhi currently costs Rs 47.93 per litre.