"This has been the thinking for quite some time," that a price rise could come after presidential polls, the official said, requesting anonymity.
"It is inevitable. By how much I can't say," he added.
The government heavily subsidizes diesel prices as the fuel powers much of the economy, especially in farming and transportation.
The official added that petrol prices—ostensibly already freed from government controls—were currently not causing any losses for India.
"It is under control, there is volatility both on the rupee front and oil prices (global) at the moment we are not incurring any loss," he said.
The government had in June 2010 announced the deregulation of petrol and diesel prices. Oil companies raised prices with immediate effect—petrol became dearer by Rs 3.50 and diesel by Rs 2. The opposition parties later raised objection to hiking the price of diesel, forcing the government to retract the deregulation of diesel. The Rs 2 hike was immediately rolled back after this.
The opposition argued that the fuel was used largely by the transport and the agriculture sector, and a price hike would push up prices of almost all other products, including food.
With inputs from Reuters