The matter will come for discussion during the meeting of Empowered Group of Ministers (EGoM), headed by Finance Minister Pranab Mukherjee.
The EGoM in its last meeting on August 8 considered the recommendations of Task Force on Direct Transfer of Subsidies on Kerosene, LPG and Fertiliser but deferred a decision on limiting supply of subsidised LPG.
The limited supply of subsidised LPG would be for those who own a car, two-wheeler, house or figure in the income-tax list.
Each 14.2-kg bottle of LPG normally lasts a household 45-60 days and based on this calculation a maximum of six cylinders are considered enough to see a family through the year.
At present, records of LPG distributors of public sector companies shows that a vast number of households are taking as many as 20 to 30 cylinders per household each year.
This suggests that large scale diversion of subsidised cooking gas is taking place for use in commercial establishments, such as restaurants and dhabas and as auto fuel.
LPG for commercial use is sold at the market price and packed in different cylinders.
Sources said limiting supply of subsidised LPG cylinders would help cut down losses that state-owned oil firms incur now on selling the fuel at government controlled rates.
Indian Oil, Bharat Petroleum and Hindustan Petroleum lose about Rs 63 crore per day on selling domestic LPG below cost.
The EGoM may also consider the revenue loss that state firms incur on selling not just LPG but also diesel and kerosene.
The three firms lose Rs 5.14 a litre on diesel and Rs 24.42 per like on kerosene. At current rate, they are projected to post a combined revenue loss of Rs 108,746 crore in the current fiscal.
The EGoM, sources said, may decide on how this loss would be bridged. The government currently roughly half the revenue loss and another one-third comes from upstream firms like ONGC.
The panel may decide if the current revenue loss sharing formula should continue or be altered.
Government oil companies yesterday hiked petrol price by Rs 3.14-3.32 per litre after decline in rupee's exchange value increased the cost of buying crude oil and widened losses from fuel sales.
Petrol price in Delhi has been hiked by Rs 3.14 a litre to Rs 66.84 per litre. The revised rates would now be Rs 71.62 per litre in Mumbai, Rs 71.15 per litre in Kolkata and Rs 70.64 per litre in Chennai.
Petrol price will vary from city to city due to differential rates of local sales tax. The fuel in Mumbai will cost Rs 3.29 a litre more at Rs 71.28 per litre; while in Chennai the price have been increased by Rs 3.32 to Rs 70.82 per litre.
Current petrol price of Rs 63.70 per litre in Delhi corresponds to crude oil price of about USD 103 per barrel. But crude today is at USD 110-111 per barrel. This difference coupled with weakening rupee against the US dollar necessitated the increase in petrol price.
This is the second hike in four months. Oil companies had last hiked petrol price by Rs 5 per litre on May 15.
Though petrol price were freed in June last year, state oil firms continue to informally consult the government before revising local rates.
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