NEW DELHI, May 14 (Reuters): State-run oil firms will raise petrol prices by about 8.6 percent or Rs. 5 a litre from Sunday, company officials said on Saturday, a record hike that will fuel inflation in Asia`s third-largest economy.The first rise since January comes a day after the ruling Congress party-led coalition, under pressure over high inflation and allegations of corruption, avoided a major voter backlash in five state elections. A ministerial panel to consider raising prices of subsidised fuel was deferred last week, showing the government`s reluctance ahead of the polls to take steps to adjust to globally higher prices and bolster public finances. Last June, the government allowed state-run oil firms to fix the price of petrol but continued to control the prices of diesel, kerosene and cooking gas to protect the poor and try to tame inflation.Headline inflation in India stands at just under 9 percent. Asian rival China last month raised gasoline and diesel prices by about 5 percent.Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp will raise their prices at midnight on Saturday by Rs. 5 rupees a litre.A litre of petrol in Delhi will cost around Rs. 63.7 on Sunday.”Petrol prices should have been raised by about 10 rupees a litre but we have increased them only by 5 rupees in public interest,” R.K. Singh, head of BPCL, told Reuters.”Since inflation is already high we have not passed on the full impact.”The oil sector is one of the biggest contributors to federal revenues. Taxes in India, which imports about 80 percent of its fuel needs, are among the highest in the region, making up 46 percent of pump prices on petrol and 31 percent of diesel.IOC, which is India`s biggest refiner, controlling 1.294 million barrels per day of crude processing capacity, said its debt is growing by 50-60 billion rupees every month due to the sale of refined products at subsidised prices.The state run firms dominate oil marketing in India and tend to adjust prices in tandem.