Though the CCPA is likely to discuss a price hike in diesel, LPG and kerosene, a final decision will be taken only after talks with allies, the sources said.
Shares in state-run oil refiners traded higher ahead of the meeting. BPCL was up 2.5 per cent, while HPCL traded with 2.2 per cent gains.
State-run oil marketing companies are losing Rs 550 crore everyday on under-recoveries as a result of higher crude prices in the global markets.
They make a loss of Rs 17 per litre on diesel sales, Rs 32.7 per litre on kerosene sales, and Rs 347 per cylinder on cooking gas sales every day.
Oil firms are seeking Rs 32,000 crore in under-recoveries for the first quarter of the current fiscal year. The companies are not compensated for petrol sales since the government decontrolled petrol prices in June 2010.
An increase in fuel prices is necessary to cut down the government's subsidy. According to the present policy, the government will have to make good half of it by way of cash subsidy.
Prices of diesel as well as LPG and kerosene have not been increased since June last year, although the cost of production has jumped nearly 28 per cent, industry sources earlier said.