New petroleum secretary R S Pandey, who took over reins from M S Srinivasan, has directed oiil marketing companies (OMCs) not to put any restrictions on ''release and registration'' of new LPG connections and resume issuing new domestic LPG connections.

He issued these directives at a meeting of officials from three public sector oil marketing companies - Indian Oil, Bharat Petroleum and Hindustan Petroleum -- as a backlog of nearly 2.5 lakh new consumer applications waiting LPG connections had been created.

These connections were suspended by the public sector oil marketing companies since April following liquidity crunch and a huge shortfall of LPG gas cylinders (See: PSU oil marketing companies propose fuel rationing, halt to new LPG connections) 

Pandey assured the OMCs that he would prioritise and address the problem of liquidity crunch .

Since IOC and Bharat Petroleum Corporation had reported a shortfall of 10 lakh and 5 lakh LPG cylinders respectively, Pandey directed them to purchase additional cylinders to overcome the shortfall and hoped that the backlog would be wiped out in the next two months.

Hindustan Petroleum Corporation Limited said it had adequate stocks of cylinders.

Due to the liquidity crunch IOC had no money to buy new equipment including LPG cylinders and so it had temporarily suspended issuing fresh connections (See: Indian Oil stops new LPG connections)

Public sector oil marketers are loosing are losing Rs338 on the sale of every LPG cylinder and IOC loses Rs 33 crore per day on LPG sales as the government had put a cap on the price. The three public sector units are losing over Rs550 crore a day on sale of petrol, diesel, kerosene and LPG at subsidised rates. The oil companies are borrowing Rs3,500 crore per month to keep going.

The new petroleum secretary's prime task would be to ensure that there was no shortage of petro products, but at the same time protect the interests of the oil marketing companies in view of the unprecedented movement in the crude oil prices.

Pandey also met petroleum minister Murli Deora to convey the problems that the OMCs were facing.