India's prime minister returned from abroad on Saturday to face a political revolt over a petrol price increase with a key coalition ally threatening to withdraw support unless the hike is reversed.
The Trinamool Congress, the second-largest party in the coalition with 19 lawmakers, said it may quit the ruling alliance unless Prime Minister Manmohan Singh rolls back the price rise.
"Our withdrawal of support may result in fall of the government," Trinamool chief Mamata Banerjee said late on Friday, but added "we will not accept this burden on the poor."
Banerjee, however, said she would wait until she met with the prime minister. She made the statements after she held an emergency meeting with the parliamentary wing of the party.
"If it goes on like this we don't want to stay in the government," she said.
The state-run oil firms raised petrol prices on Friday in order to offset losses on sales due to an 11 per cent drop in the rupee against the dollar since April and high crude oil prices.
The 1.8 rupee or four cent a litre price rise was the fourth since January, pushing the cost of a litre of petrol to around 67 rupees.
The DMK, the third-largest party in the national coalition with 18 members, also demanded a rollback of the price increase.
Singh, however, defended the price hike in a televised statement in Cannes, France, saying that India "must move in the direction of decontrolling more prices. I have no hesitation in saying that markets must find their own levels."
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