Union petroleum and natural gas minister M. Veerappa Moily said there was no question of a rollback of the diesel price hike.
Speaking to reporters here on Saturday, he said, "Sometimes, the people do not understand that when it comes to kerosene that will affect the large numbers of the mass, we have not increased any price... and when there was a public demand that LPG of six is not adequate, we increased it to nine without increasing the price."
"But in so far as the diesel is concerned, there is a report from Vijay Kelkar and this has been going on even during the days of the NDA that there should be a de-regulation of the diesel. And this is the only country where we have the regulation of the diesel," he said on the sidelines of the Congress Party´s two-day Chintan Shivir.
Moily said that the cheapest diesel and petrol was available in India in spite of the fact that 83 per cent of the diesel or petroleum products were imported.
"We have to pay dollars and billions of crores are paid. For this, we have to tax some people. (If) we have to pay in dollars then ultimately the country will become bankrupt," he said.
State-run oil firms hiked diesel price by 45 paise per litre from Friday, prompting the political parties both within and outside the ruling coalition umbrella to slam the Congress-led United Progressive Alliance (UPA) regime.
Dravida Munnetra Kazhagam (DMK), which is a key ally of the Congress party at the Centre slammed the government over the matter and urged it to ´reconsider´ its decision to allow the retailers to raise diesel price in small amount.
DMK chief M Karunanidhi said in a statement: "The Centre should reconsider its decision. The decision of giving the oil companies the authority to increase price is wrong. The steady increase will affect poor and middle class and will have a cascading effect."
Criticising the Centre, Bahujan Samaj Party (BSP) chief Mayawati said: "It is an anti-people decision by the government."
She said the government had become one which only works for the rich and not the poor.
The BSP supports the UPA from outside.
Trinamool Congress MP Derek O´Brien tweeted: "Push the diesel prices up now and then present a goody-goody budget. Some old Congress tricks never die."
The hike, however, has cheered markets as the BSE sensex touched the 20,000-mark on Friday.