State-owned oil marketing companies are planning to enter the market with 1-litre bottles of kerosene by the end of the year to tap the growing non-public distribution system kerosene market. The move is aimed at preventing diversion of PDS kerosene as it is subsidised by nearly Rs 15 per litre.
“We are trying to capture a market of free-sale kerosene that currently exists. In absence of any supplies to the market, the diversion of PDS kerosene into the black market becomes inevitable,” a petroleum ministry official said.
Hindustan Petroleum, Bharat Petroleum and IndianOil have been asked to make an impact analysis of the move so that the potential of the market could be fully exploited. “The move will benefit the exchequer substantially as it substantially subsidises the under-recovery from PDS kerosene,” officials added.
In the first quarter of the current financial year (April-June), IOC, BPCL and HPCL together lost Rs 1,553 crore on selling petrol, Rs 4,633 crore on diesel, Rs 4,028 crore on kerosene and Rs 2,698 crore on domestic LPG. As a result, the under-recoveries in the first three months of the financial year were to the tune of Rs. 12,912 crore.