Much would depend on the national policy on subsidies that is being worked out by the finance ministry following a call by the prime minister to usher transparency and better targeting of subsidies, and the group of ministers headed by Pranab Mukherjee which has been appointed by the cabinet to suggest alternatives on pricing of petroleum fuels.

• Other non-financial options before the government?

Since much of the subsidy on kerosene and LPG gets siphoned away from the intended users, the government plans to cut its subsidy outflow on kerosene by 40 per cent by restricting supplies to BPL households. The diversion of LPG cylinders to commercial establishments shall be restricted by introducing an electronic tracking system in the form of electromagnetic cards and radio frequency identification. To check adulteration of kerosene in diesel, the government has launched a scheme of mixing a marker chemical in kerosene. In order to make available a reasonably priced alternative to PDS kerosene to those who have higher purchasing power, the OMCs are proposing the sale of non-PDS kerosene in one litre bottles for which they have asked the finance ministry to abolish excise and customs duties.

amitav.ranjan@expressindia.com