The Finance Ministry wanted export parity pricing for diesel and kerosene in 2012-13 and wanted LPG to be priced through a 60-40 mix of export and import parity rates.
Officials said a shift to export parity pricing would have cut the subsidy on diesel by Rs 14,372 crore to Rs 77,689 crore in 2012-13. Another Rs 2,245 crore would have been saved on LPG and Rs 1,001 crore on kerosene during the period.
The saving would come from the removal of import duty and notional transportation cost in the import parity price.
For the current fiscal, the total subsidy for selling diesel, kerosene and LPG at rates below cost was put at Rs 80,000 crore in April but has now climbed to around Rs 1,30,000 crore as the falling rupee has made imports costlier.