"Polling in Rajasthan will end today and with it electioneering in four major states. And so a revision in fuel prices is likely to be taken to the Cabinet at its next meeting scheduled on December 11," a government source said.

For the first time in three years, state-run Indian Oil [Get Quote], Bharat Petroleum and Hindustan Petroleum are selling petrol at a profit of Rs 14.89 a litre and diesel at Rs 3.03 per litre.

But they continue to lose Rs 17.26 on sale of every litre of kerosene through public distribution system (PDS) and Rs 148.32 per 14.2-kg domestic LPG cylinder.

"The Congress-led coalition is keen on rolling back the Rs 5 a litre hike in petrol, Rs 3 per litre increase in diesel and Rs 50 per cylinder hike in LPG prices announced in June.

As oil firms continue to make losses on LPG, some of the margins on petrol may be used to bring down the cooking fuel price," the source said.

Polling in Jammu & Kashmir --one of the six states that went to elections--  would end on December 24. "When even Election Commission thought it appropriate to announce results of the elections in Delhi, Madhya Pradesh, Chhattisgarh, Rajasthan and Mizoram (on December 8) without waiting for polling in J&K, the government, too, is inclined to cut fuel prices," he said.

State-run oil firms have seen margins turning into positive zone from November 1 but the government did not want to revise prices as the Model Code of Conduct for elections was in place that bars it from making any announcement that could be seen as appeasing voters.

Based on the average international oil price in the second fortnight of November, the state-run firms earn a margin of Rs 44 crore (Rs 440 million) per day on petrol and Rs 42 crore (Rs 420 million) a day on diesel. They, however, lost Rs 66 crore a day on sale of kerosene and Rs 29 crore (Rs 290 million) per day on LPG.

The fall in international oil prices will result in lower revenue loss on fuel sales this fiscal. IOC, BPCL [Get Quote] and HPCL [Get Quote] will end the 2008-09 fiscal with Rs 109,190 crore (Rs 1091.90 billion) revenue loss, Rs 92,853 crore (Rs 928.53 billion) of which has already been accounted for in the first half of the fiscal.

The source said the Cabinet may also consider a mechanism to make good the losses oil firms have borne on selling fuel below the cost.

IOC posted its largest ever net loss of Rs 7,047.13 crore (Rs 70.47 billion) in July-September quarter. BPCL posted a net loss of Rs 2,625.17 crore (Rs 26.25 billion) in the second quarter on top of Rs 1,066.70 crore (Rs 10.66 billion) in April-June, while HPCL reported Rs 888.12 crore (Rs 8.82 billion)  loss in the first quarter and another Rs 3,218.92 crore (Rs 32.18 billion)  in the second quarter.

The state-run firms want the government to increase the quantum of oil bonds they get as part of compensation for selling fuel below cost.

The government compensates the three refiners for half of their revenue loss on fuel sales by way of oil bonds. Another one-third of the losses are met by companies like ONGC [Get Quote] and OIL by way of discounts on crude oil they sell to them.

However, this compensation was proving to be grossly inadequate, sources said, pointing to the net losses posted by the companies in July-September quarter.