The Rs 3,000 crore import bill for the domestic cooking fuel will also drop drastically. On the flip side of the coin, the frenetic growth in LPG consumption (roughly nine per cent per annum) and imports will get a policy fillip. Think tanks in government obviously consider LPG the lesser evil of the two subsidy guzzling petroleum products. Since April this year, the Union petroleum ministry has been writing to state governments offering them more LPG connections in return for surrendered kerosene quotas. Already Andhra Pradesh, Rajasthan and Maharashtra have shown interest in the new schemes. The Delhi government, which was offered the scheme lastyear, opted for three lakh new LPG connections in preference to a reduced kerosene quota. The Andhra Pradesh government has sought 10 lakh new LPG connections and is willing to give up allocations for 3,636 tonne of kerosene per month. Other state governments are yet to respond. If the trend catches on, the already snail-pace growth in kerosene consumption could grind to a halt altogether.

The thrust on LPG is an attempt to curb the use of environmentally dangerous fuels, like wood and smoke-generating kerosene oil. The petroleum ministry had been allotting higher LPG quotas particularly in environmentally fragile areas, such as hilly areas prone to massive deforestation because of the widespread use of wood as a fuel.

The programme has had a somewhat stinted start because of the limited availability of the cooking gas. The country imports 30 per cent of its LPG requirements and may continue to do so, even when as the domestic availability grows.

Policy-makers do not even expect LPG imports to come downin future. Industry experts say even when all the new refineries on anvil begin production, LPG supplies at home will not be able to cope with the already roaring demand.

Even so, LPG is preferable to kerosene, primarily because it is a better fuel, but also because it is less of a burden on the national exchequer. The subsidy on superior kerosene oil was Rs 5,820 crore in December last year, compared to the LPG subsidy of Rs 1,660 crore.

At present the oil pool account subsidises more than 37 per cent of the LPG cost. The subsidy on every litre of kerosene is more than 170 per cent. The 14 kg cooking gas cylinder, which is available for Rs 146 in the capital, costs the oil pool account another Rs 55.33. For every litre of kerosene available at a price of Rs 2.56 through the public distribution system (PDS) in Delhi, the oil pool provides a subsidy of Rs 4.62. Petroleum product prices vary from state to state, but the subsidy element is the same.

What is worse is that the 10.58 million tonnes ofkerosene apparently consumed within the country, does not really reach the have-nots it is intended for. A great deal of the subsidised cooking fuel is used to adulterate costlier petroleum products like diesel and motor spirit.

The Centre's plan to systematically hack a portion of the subsidy every year till oil prices were deregulated in April 2002, has already been somewhat upset, because the Centre preferred the soft option of retaining subsidies in this year's Budget. According to the administered price mechanism (APM) dismantling schedule, the subsidy on kerosene will be rolled back at the rate of 33 per cent every year (beginning this year) till only 33.33 per cent of subsidy remains in 2002. The subsidy on LPG is expected to peter down to 15 per cent by that year. The oil pool account, now used to cross-subsidise kerosene and LPG with petrol and aviation turbine fuel (ATF), will vanish by then. The subsidies on kerosene and LPG will consequently, pass on to the Union Budget. This year the BJP-ledcoalition at the Centre preferred not to touch the ``poor man's fuel'' and subsequent governments are unlikely to invite his wrath either.

The subsidy on kerosene could hang around the neck of the government like a giant albatross, unless of course, the need for the ``poor man's fuel'' evaporates altogether.

The policy thrust of the petroleum ministry now is to offer the ``poor man'' a cleaner and more convenient fuel in exchange for his right to buy kerosene at the ration shop. For long, the LPG marketing plan of the national oil companies mainly covered towns with a population of 20,000 or more.

Now companies scout locations for distributorships at urban habitats with a population of 10,000 and include villages around it in their marketing plans. Clusters of villages that together have more than 10,000 inhabitants are also surveyed as prospective locations for distributorships.

Cooking gas cylinders have been replacing coal, wood and kerosene as a domestic fuel steadily and rapidly over the decadegone by. The annual growth in LPG consumption galloped at a pace of 18.4 per cent during the Sixth Plan period and 18.9 per cent during the Seventh Plan period, before cantering down to 9.2 per cent during the Eighth Plan.

The first two years of the Ninth Plan period found LPG consumption growing at a pace of 8.7 per cent and 10.1 per cent, before settling down to nine per cent last year. In the span of a decade the use of LPG as a fuel increased four-fold to more than four million tonne a year.

The tribe of kerosene users have not prospered as much. Consumption of kerosene oil was growing at a healthy pace of nine per cent during the Sixth Plan, but petered down to 6.7 per cent during the Seventh Plan period and 2.6 per cent during the Eight Plan.

The demand for kerosene oil increased to 10.58 million tonnes last year from 8.42 million tonnes in 1990-91, which is not half as dramatic as the growth in LPG consumption. Yet the use of superior kerosene oil still accounts for nearly 12 per cent of thetotal petroleum products consumption, compared to 5.4 per cent for LPG.

That is the ratio that needs to be changed. It could change too, as long as the Centre continues to offer new (LPG-powered) lamps for the old (kerosene) ones.