State-run oil marketing companies selling subsidised liquefied petroleum gas and kerosene will take a hit of Rs 2,000 crore (Rs 20 billion) during the next two months till the new government is installed at the Centre.

This is because the interim Budget for 2004-05 had imposed a further 33 per cent cut in subsidy on the two cooking fuels effective from April 1 -- the beginning of the new financial year.

Apart from this, the two upstream oil companies -- Oil and Natural Gas Corporation and Gail (India) Limited -- will stop sharing the subsidy burden with the marketing companies.

Moreover, the government has decided that there will not be an upward revision in the retail prices of the two oil products till the elections are over.

In the 2004-05 interim Budget presented by Finance Minister Jaswant Singh in February, the subsidy on both the products was slashed 33 per cent in an effort to eliminate the subsidy on LPG by the end of 2004-05 and bring down the kerosene subsidy to 15 per cent by April 1, 2005.

This implies that the oil marketing companies, which have been getting a subsidy of Rs 45.17 on a cylinder of LPG and Rs 1.63 on a litre of kerosene in 2003-04, will get a reduced subsidy of Rs 22.58 a cylinder and 81 paise a litre on kerosene, respectively, in 2004-05.

In November, the Cabinet had decided that in 2003-04 both Gail and ONGC would share the losses of Indian Oil Corporation, Bharat Petroleum Corporation Limited, Hindustan Petroleum Corporation Limited and IBP on account of under-recoveries from subsidised LPG and kerosene.

"The Cabinet decision on sharing of the subsidy burden was applicable only for 2003-04. Why should we continue to share the losses in the new financial year as well," said an ONGC official.

Ministry sources confirm that oil marketing companies, which are already reeling under the dual pressure of rising international prices of crude and non-revision in the domestic prices of petrol and diesel, will have to keeping incurring heavy losses on the sale of subsidised LPG and kerosene till the new government is in place at the Centre.

"Only after the new government takes over, the Cabinet can take a decision on the issue," an official said.