Kerosene through public distribution system (PDS) is sold at Rs 14.96 per litre against the actual cost of Rs 29.91. The difference between the two, Rs 14.95 per litre, is termed as under-recovery or revenue loss. While the government will provide Rs 12 to meet most of this, the remaining Rs 2.95 will be borne by oil producers ONGC and Oil India Ltd, he said. Similarly, there is an 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. At current rates, all of the under-recovery is within the sanctioned subsidy limits.

Pradhan added, at present, the state-owned fuel retailers incur under-recoveries on sale of PDS kerosene and subsidised domestic LPG only as petrol and diesel have been deregulated (market-linked) with effect from June 2010 and October 2014 respectively.

For 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," the minister said in a written reply to a question in Lok Sabha.

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