Private Sector Can Sell Subsidised Lpg, Kerosene

In a major policy reversal, the government has decided to allow private companies to market subsidised liquefied petroleum gas (LPG) for domestic use and kerosene sold through the public distribution system (PDS) after the administered pricing mechanism (APM) in the oil sector is dismantled on March 31 next year.

In a communication to finance secretary Ajit Kumar, petroleum secretary VN Kaul has said that to facilitate the entry of the private sector in the marketing of subsidised LPG and PDS kerosene, the government would need to put in place a mechanism to administer subsidy at 15 per cent of import parity in the case of domestic LPG and 33.33 per cent for PDS kerosene even after the dismantling of APM. The move goes a long way in meeting the long standing demand of parallel marketers of LPG and kerosene who have been complaining to the government that a bar on marketing subsidised LPG and kerosene has pushed them out of business.

So far, the marketing of domestic LPG and PDS kerosene has been restricted to the four public sector oil companies (PSUs)