Nayantara Rai, CNBC-TV18

Hoping to offset the projected two lakh crore rupees under recoveries this year, the OMCs wanted to freeze all new LPG connections, but they have found no takers for their plan. The OMCs are carrying on with this plan at least for now, even though it amounts to political harakiri in an election year.

After stepping on the gas to sell more expensive branded fuel, oil marketing companies have come up with another plan to offset their under recoveries this fiscal. The three state-owned OMCs, namely IOC, BPCL and HPCL wrote to the petroleum ministry on Friday saying they dont want to give out new connections for LPG cylinders. The companies also said they wanted to restrict sales to one LPG cylinder per family.

The oil ministry has dashed their plans. Senior officials say freezing new connections was out of the question. Infact, they are not even in favour of further rationing. To make matters worse for OMC's, oil ministry officials say if consumers face a problem getting new connections, they should write to the respective companies and if that doesn't help they should get in touch with the ministry.

But despite all these reassurances, OMCs have already told their field officers to put all new gas connections on hold. Sources say, the petroleum ministry has been updated on this development.

OMCs are losing approximately Rs 300 per LPG cylinder. And for this fiscal, projected under recoveries for the three OMCs stand at a staggering Rs 2 lakh crore at current crude levels. But in an election year, freezing LPG connections would amount to political harakiri.