The finance ministry, battling a tight fiscal situation, is understood to have agreed in principle to the petroleum ministry's proposal of increasing the cap on subsidised cooking gas cylinders from six a year to nine.
The ministry has been holding out against the move as it would leave a Rs. 9,000-crore dent in government finances.
However a senior government official said that the petroleum ministry has proposed a workaround formula to mitigate the additional subsidy burden arising out of this move on the government.
Refusing to share the details, he said, "Its confidential as it is part of the cabinet note that is yet to be moved."
He said the petroleum ministry has already readied a cabinet note for increasing the cap on subsidised LPG cylinders to nine, and will move it after the Gujarat elections.
"We are working on ways to mitigate the additional subsidy requirement," petroleum minister Veerappa Moily had said on Tuesday. "We are working on a formula to neutralise it."
The price of subsidised LPG is Rs. 410.42 a cylinder in Delhi against the market price of Rs. 895.50. The six-cylinder cap was imposed in September.