Sources told The Indian Express that the Ministry has tabulated the extent of under-recoveries — and the revised sharing between government and the oil industry — with price cuts of Rs 4 a litre on petrol and Rs 2 a litre on diesel.

The ministry’s paper pegs November 16 as the date for price revision pending Cabinet clearance. The winter session of Parliament begins on November 22.

This move follows a drop in international prices and the subsequent demands by Left allies and from within the Congress as well to bring back the old price regime. The last such concerted cut by the Centre was in October 2003 for diesel and in November 2004 for petrol.

In June this year, the government raised diesel price by Rs 2 and petrol price by Rs 4 on the grounds that crude prices had climbed to $71 a barrel from $56 in September 2005. Crude now hovers at $56.

Sources said the proposal does not seek any relief through cuts in excise duty on either petrol or diesel. In August, Petroleum Minister Murli Deora wrote to Finance Minister P Chidambaram requesting a cut in excise duty on both transport fuels.

In states that reduced their sales tax to partially offset the price burden, the ex-storage prices would be lowered to account for the tax credit so that states could raise the tax to earlier levels, said sources.

The under-recovery, after the proposed price cuts, is estimated at Rs 51,964 crore compared to the pre-June figure of Rs 67,000 crore. The biggest gainer of this reduced under-recovery will be the government with a 42.24 percent cut in the bonds issue to Rs 21,950 crore from the June-determined Rs 28,300 crore.

Upstream companies Oil & Natural Gas Corp and GAIL (India) Ltd would have to eke out less at Rs 18,610 crore instead of Rs 24,000 crore. The losses or net under-recovery for oil marketing companies are estimated to come down to Rs 11,404 crore from Rs 14,700 crore.