April 16, 2012. Making a case for increasing prices of petroleum products and deregulating diesel prices, the Reserve Bank said these steps are necessary to contain fiscal slippages and arrest decline in growth. While petrol prices are market-linked, the government decides the rates of LPG, kerosene and diesel, which usually results in a large budgetary expenditure on subsidies. The RBI said that the imports bill will remain high unless prices of petroleum products are raised for a complete pass-through and demand for precious metals is curbed. Crude oil prices have been rising due to geo-political reasons, including the Iran situation. The prices had touched a high of USD 125 a barrel. High subsidies are putting pressure on the country's fiscal deficit, which has touched 5.9 per cent of GDP last fiscal and 5.1 per cent in 2012-13. The government targets to bring down the subsidy bill to below 2 per cent of GDP this fiscal and 1.75 per cent in the subsequent years. Government has made a provision of '40,000 crore towards fuel subsidy. On the current account deficit, RBI said that the government should take steps to retain it at the current levels. It said the robust demand in gold and continuing high crude oil prices could adversely affect India's trade balance.