On Monday, the Oil Minister Dharmendra Pradhan said that the government has capped the subsidy payout on kerosene and domestic cooking gas (LPG) at Rs 12 per litre and Rs 18 per kg respectively.

The actual cost of kerosene is Rs 29.91 and it is sold through public distribution system (PDS) at Rs 14.96 per litre, the difference between the two Rs 14.95 per litre is termed as under recovery or revenue loss.

He said that Rs. 12 will be provided by the government and remaining Rs. 2.95 will be born by oil producers ONGC and Oil India Ltd.

Similar to that the under recovery or loss of Rs 167.18 on sale of every 14.2 kg subsidised LPG cylinder at the current price of Rs 417.82.

He said that for the year 2015-16,  “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.

“The government has approved a fixed subsidy of Rs 18 per kg under the Direct Benefit Transfer for domestic LPG.”

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