Petroleum minister Murli Deora with oil PSU chiefs in New Delhi on Tuesday. Picture by Prem Singh

New Delhi, Aug. 19: The government today directed state-run oil companies to clear the backlog of new domestic LPG cylinder connection within 60 days.

This was decided at a meeting — called to review the availability of essential petroleum products — between petroleum minister Murli Deora and the heads of oil companies. Deora asked oil retailers to ensure adequate supplies of cylinders during the festive season. “LPG connections will be available on demand,” petroleum secretary R.S. Pandey said after the meeting.

Pandey asked Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) to liquidate the waitlist for the new connections in two months. “Distribution system will be so organised that there are no shortages in days to come especially during the festive season.”

IOC chairman Sarthak Behuria said the company had a waiting list of 6-7 lakh and it had placed orders to buy 10 lakh new LPG cylinders to clear the backlog.

The petroleum ministry accepted the proposal of the oil companies to suspend supplies of cylinders to those having piped natural gas connection. It, however, rejected a suggestion to limit cylinders to one per household. India has over 10 crore LPG consumers, the second largest customer base in the world.

Oil companies currently sell petrol at a loss of Rs 7.07 per litre, diesel at Rs 16.22 per litre, kerosene at Rs 39.55 per litre and a 14.2 kg LPG cylinder at a loss of Rs 348.89.

IOC, BPCL and HPCL are together projected to lose Rs 1,84,801 crore in revenues on fuel sales during 2008-09.

Pandey said the losses of oil companies for selling fuel below cost in the first quarter of this fiscal had been calculated at Rs 48,000 crore, and the finance ministry had agreed to issue bonds for 50 per cent of that sum. The fall in crude oil price in global markets has, however, whittled down the losses of the companies.

A fortnight back, the losses were expected to be Rs 2,05,740 crore for the fiscal.

Though the price of crude oil rose $3 on Tuesday to nearly $116 a barrel because of the weakness of the dollar, it is far below its peak of more than $147 in mid-July. By 16.15 GMT, crude in New York had surged $3.05 to $115.92. “The fall in crude prices is a happy sign,” Pandey said.

The Centre also asked the public sector oil marketing companies to cut wasteful expenditure and improve efficiencies. Pandey said oil retailers should stop looking at the government for support all the time.

The meeting also decided that the oil companies would roll out a public grievance redressal mechanism in all areas within two weeks.