LPG cylinders, used for cooking in households, will now come with a radio frequency tag to detect if the heavily subsidised gas was being diverted to commercial establishments like restaurants.

Domestic LPG costs Rs 348.89 less than the cylinders meant for commercial use and this difference often leads them into restaurants and hotels who are supposed to use only industrial LPG, a Petroleum Ministry official said.

All cylinders will be tagged with a unique number and consumers will be issued smart cards. Every time a refill is delivered, the unique number would be stored on the smart cards. All this information will be accessible to oil firms who would bottle LPG only in those cylinders which had actually been used in some household.

The Chief Controller of Explosives (CCOE) has approved the proposal for introduction of the system and the project will be implemented in phases beginning 2009, the official said.

Oil companies have already colour differentiated the domestic use cylinders from those meant for non-domestic usage red is the colour of 14.2-kg cylinder meant for household use and oxford blue would be the colour for 19-kg commercial cylinder.

Besides, they have also decided to eliminate multiple connections in one household and stop supply of subsidised gas to places having piped natural gas supply, the official said.

Indian Oil Corp has already conducted two successful trial runs for tagging LPG cylinders with radio frequency chips, while Bharat Petroleum has carried a trial run at its Pune plant. Hindustan Petroleum has done the same at its Nasik plant.

HPCL has placed orders for RFID-based cylinder tracking system in March 2008 for which the site survey and firming up of specifications is underway. The project is expected to be completed by December this year.

The official said that 433 cases of LPG cylinders being diverted were detected in 2007-08. The number of cylinders actually found diverted stood at 82,145, of which 32,804 were seized during raids.

Other stringent measures on the hit-list include a refill audit on distributors and raids on commercial establishments to curb diversion. It will also eliminate the system of multiple connections and would block refill supply to those identified as having more than one connection.

Along with RFID (radio frequency identification) tags, a smart card is likely to be introduced to ensure the subsidized fuel reaches the intended consumer.

IOC, BPCL and HPCL are working in tandem for the same and a system of inter-company detection is being planned.