Subsidy rider for parallel LPG sellers

The finance ministry has said only those parallel marketers who sell cooking gas at, or below, the price charged by the public sector oil companies will be given a subsidy.

This implies that the parallel marketers will have to absorb the Rs 106 of under-recovery per cylinder of LPG suffered by the oil PSUs. The under-recovery is shared by the public sector firms through a formula devised by the petroleum ministry.

"Since no such mechanism will be available to the parallel marketers, it will be virtually impossible for them to sell cooking gas at the price being charged by the oil PSUs, leave aside selling below that price," an industry source said.

The other factor that goes against the parallel marketers is that this subsidy will be available only till March 31, 2005.