The Petroleum Ministry has reportedly proposed to hike the cap on supply of subsidised LPG cylinders from the existing six to nine per household per year.

Citing sources, news channel NDTV has reported that Petroleum Minister Veerappa Moily has tabled the proposal before the cabinet with a suggestion that each additional LPG cylinder should cost Rs 100 more.

Around a week ago, Mr. Moily had announced that the government was considering increasing the cap on supply of subsidised cooking gas cylinders.

The government is considering the Kelkar Committee report that recommends phased increase in prices of fuels to arrest widening fiscal deficit.

On Monday, Prime Minister Manmohan Singh said that energy prices in India were well below international prices, and thus there was a need of a phased rationalization of prices of energy products such as coal and petroleum to bring them in line with international prices.

Currently, subsidised LPG costs Rs 410.50 per cylinder, but any cylinder beyond the cap of six cost nearly Rs 895.50, at market price. Therefore, government-owned oil marketing companies, viz. IOC, HPCL and BPCL, are selling cooking gas at loss of around Rs 490.50 for each refill.