New Delhi: Domestic LPG prices may go up by Rs 22-25 per cylinder this week as oil companies push for a hike in retail selling price in view of Budget 2003-04 lowering subsidy provision for cooking gas and PDS (public distribution scheme) kerosene.

"Though the Budget shows a 40 per cent increase in subsidy outgo on kerosene and domestic LPG, the Rs 6,300 crore provision for 2003-04 includes undisbursed subsidy element of Rs 2,198 crore for the current year," official sources said.

Finance Ministry had provided Rs 4,495.80 crore subsidy this fiscal, they said, adding subsidy on LPG has gone down from Rs 67.75 (for 2002-03) to Rs 46 per cylinder while that for kerosene has fallen to Rs 1.64 per litre for the next fiscal from Rs 2.45 per litre, necessitating a hike in price.

State oil firms have together lost about Rs 3,200 crore during 2002-03 on selling LPG and kerosene below the cost. The Rs 67.75 per cylinder subsidy element provided this fiscal covers only half of the Rs 125 per cylinder gap between the artificially suppressed domestic retail price of Rs 241.20 in Delhi and actual average cost.

The subsidy cut implies raising kerosene prices by close to a Rupee but given the nature of the politically sensitive commodity, its prices may not be increased.

"Oil companies are pushing for passing on at least the reduced subsidy on LPG to consumers and a decision was likely this week," they said, adding Petroleum Minister Ram Naik will have the final say on the matter.

PTI