Domestic consumers of Bharat Gas are likely to continue getting the subsidy benefit for their LPG cylinders even after the privatisation of state-owned refiner BPCL.

There has been a growing concern among investors during the roadshow on this front. Following the issuance of expression of interest, consumers were also concerned whether they would get the LPG cylinders at subsidised rates after the privatisation of the firm.

Sources said the issue has been flagged and the oil ministry would soon prepare a note for cabinet clearance before the strategic sale of the company.

The company has a 25.67 per cent market share in the LPG segment in the country with a customer base of 8.1 crore. It has 6,011 distributors of the cooking gas and 52 LPG bottling plants in the country with a bottling capacity in 2018-19 of 4,212 thousand metric tonnes per annum.

The company is also setting up an LPG import terminal at Haldia at an estimated cost of $157 million.

Fuel retailers sell LPG cylinders at the market price but the government subsidises 12 cylinders for each household per year by providing direct subsidy.

Last month, the price of non-subsidised domestic cooking gas was hiked Rs 149 per cylinder to Rs 896 in Calcutta. However, with the slump in demand in the global market because of coronavirus, the prices were cut on March 1 by Rs 56.50 to Rs 839.50 per cylinder in Calcutta.

The price is primarily dependent on the international benchmark rate of LPG and the exchange rate of the dollar and rupee.

So, to insulate domestic users, the government almost doubled the subsidy it provides on the fuel to keep per cylinder outgo almost unchanged.

The subsidy to domestic users has been increased from Rs 153.86 per cylinder to Rs 291.48. The domestic users are entitled to get 12 cylinders of 14.2 kg each in a year at subsidised rates.