State-run Indian companies which import oil and sell it in the domestic market have managed to keep a lid on prices earlier in the year, except for a small hike in August.

"We will continue to protect domestic consumers from the worst surge in crude prices," Oil Minister Mani Shankar Aiyar told reporters here.

New York's main oil contract closed above 51 dollars a barrel for the first time Tuesday, riding a speculative wave powered by fear of interruptions to supply from the Gulf of Mexico.

"We have a system to deal with normal volatilities," Aiyar said, referring to the government's protection mechanisms. "But in abnormal times, government has to take a view," he added, without elaborating.

He said a meeting has been scheduled with Prime Minister Manmohan Singh next week to discuss the situation.

Any rise in the price of crude has a major impact on India as it imports over 70 percent of its oil needs.

India's inflation has risen to a three-year-high at around eight percent in recent weeks due to the combined effect of the oil price rise and scanty monsoon rainfall hitting prices of fruits and vegetables.

Indian Finance Minister Palaniappan Chidambaram Tuesday in Washington urged multilateral institutions to help countries exposed to oil price shocks and said the current oil price situation made macroeconomic management in India "very complex."