New Delhi: The government will subsidise the under-recovery on sale below cost of public distribution (PDS) kerosene at Rs.12 per litre and domestic cooking gas (LPG) at Rs.18 per kg, with the balance loss being borne by state-run oil marketers, parliament was told on Monday.
“The government has approved budgetary support for PDS kerosene under-recovery at a rate of Rs.12 per litre and the remaining under-recovery will be borne by the upstream companies,” Petroleum Minister Dharmendra Pradhan told the Lok Sabha in a written reply.
For the current fiscal, while the government will provide Rs.12 towards subsidising kerosene, the remaining Rs.2.95 will be borne by state explorers ONGC and Oil India, he said.
“The government has approved a fixed subsidy of Rs.18 per kg under the Direct Benefit Transfer for domestic LPG,” he added.
As per the new formula, for the first quarter of the fiscal ended June, the government will provide Rs.1,733 crore cash subsidy to Indian Oil, Rs.404 crore to Bharat Petroleum and Rs.451 crore to Hindustan Petroleum.
Towards LPG, the subsidy support to Indian Oil would be Rs.2,506 crore, Bharat Petroleum Rs.1,155 crore and Hindustan Petroleum Rs.1,183 crore, the minister said.
LPG customers are allowed 12 cylinders per every household at the subsidised rate of Rs 417.82, making for an under-recovery, or loss, of Rs 167.18 per cylinder, which the government will bear entirely.
Last month, Pradhan said the petroleum ministry is in talks with state governments on drawing up plans similar to Direct Benefit Transfer of LPG (DBTL) for public distribution kerosene, and has asked states to identify the people who require kerosene subsidy.
OMCs are facing under-recovery of Rs.18.51 a litre on sales of PDS kerosene at below market rates, the petroleum ministry said last month. The under-recovery on the fuel as on June 1 was Rs.20.10 a litre.