"The futures should be locked in when crude price is down," said the source, who is familiar with deliberations on the matter, adding the step should have been taken earlier. The rupee, Asia's worst performing currency this year, has depreciated about 12 percent year-to-date against the US dollar, closing at 72.39 on Wednesday, after a record low of 72.99 on Tuesday. Markets were closed on Thursday.
The government is expected to announce a set of measures to discourage non-essential imports to stem the slump in the currency. Separately, a senior finance ministry official said there was a view that the rupee could weaken further in the next two months if proposed steps failed to kill "speculation in the rupee market".
"The gap between the announcement of steps and action is creating a space for speculation. We have to stop this," said the official. Officials at oil companies said they were open to the idea of locking in futures if the government asked.
A senior official at Indian Oil Corp, a state-owned oil marketing company, said they were considering some options in terms of forward contracts. He declined to give details saying this was "market sensitive information".