Karnataka Chief Minister D V Sadananda Gowda today said the state government was contemplating a hike in the cess on petrol and diesel, following the increase in their prices.
"A final decision will be taken in the coming Budget Session of the Assembly," he told reporters on the sidelines of a function here.
There was no proposal before the government to reduce the cess on petrol, he added.
Tensions between Iran and the West have pushed up oil prices and oil companies may come under pressure if they rise further.
The central government, meanwhile, has refrained from rise in fuel prices in view of forthcoming Assembly elections in five states, including Uttar Pradesh.