Mumbai: Planning commission deputy chairman Montek Singh Ahluwalia has pitched for a reduction in taxes on petrol and diesel amidst a chorus by the Left parties to roll back the hike in fuel prices announced earlier this month.

"We have said in the Integrated Energy policy...Please decide on a rational tax policy and once you have a rational tax policy in place, on a medium term basis, under-recoveries of petroleum companies are not feasible," Ahluwalia said.

He said the consumers would have to bear the burden of the increasing crude oil prices, adding that he did not anticipate any easing of prices in the short run.

"I think the consumer will ultimately have to bear the burden otherwise you kill your oil companies and I don`t think the government wants to do that," Ahluwalia said

The government had announced moderate hikes in the prices of petrol (Rs 2) and diesel (Re 1) per litre, early this month.

The communist parties, meanwhile, called for the immediate roll back of an increase in fuel prices announced earlier this month, saying it was hurting the poor.

"The government should immediately roll back the increase in prices of petrol and diesel," Sitaram Yechury, a spokesman of the Communist Party of India (Marxist), said, adding, "We will raise the issue strongly in parliament."

While the decision to raise fuel prices was politically risky with polls in nearly a dozen states this year and general elections due by May 2009, it could also spark a further rise in inflation, say analysts.