The government said on Wednesday that it was considering public sector oil companies' request for hiking security deposit on LPG cylinders from Rs 650 to Rs 1000 but clarified that there was no freeze on issuance of new connections.
"No steps have been taken by the oil marketing companies regarding restricting release of new LPG connections, nor any directions issued to this effect," Petroleum Minister Mani Shankar Aiyar said in a statement.
The statement comes amid reports quoting Indian Oil Corp officials that national oil companies would not release fresh domestic LPG connections in the wake of spurt in steel prices and losses they suffered on LPG sale due to unchanged prices despite rise in cost of raw material.
The security deposit, they said, for new connection was inadequate to meet the cost for cylinders.
Aiyar clarified that "while the oil industry has cited the recent steep hike in steel prices and has sought a hike in the LPG customers' security deposit from Rs 650 to Rs 1000 per cylinder, this has not stood in the way of their releasing new LPG connections."
About 72 lakh connections were issued during 2003-04 and around 24 lakh new LPG connections released in the first four months of 2004-05, he said.
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