Saturday, July 09, 2011

LPG Refills To Cost More Very Soon

If the oil ministry has its way, cooking gas consumers would soon get only four refills in a year at subsidized rate. Every subsequent cylinder would cost Rs 800 or so at today's market price.

The ministry proposes to limit the number of subsidized cylinders for even BPL (below poverty line) at four cylinders a year. But the government would give them a one-time assistance of Rs 1,400 for getting a connection. A formal proposal, being drawn up by the ministry for the ministerial panel on fuels, explains that the plan would ensure that government subsidy reaches only those who deserve it and stop the huge black market in subsidized kerosene supplied for the poor.

The proposal outlines the criteria to identify those who have to pay market price for refills. These include anyone who owns a car, two-wheeler, house or figures in the income-tax list. The subsidy to BPL cardholders would be delivered through the unique identification number, Aadhar, as it is commonly known, regime that is in the works. The proposal rationalizes the move on the ground the present system does not differentiate between the needy and those who can afford to pay market price. It says even billionaires get their fuel at subsidized rate in the present system.

The ministry reckons four cylinders would be enough to take care of the cooking needs of a BPL family. The ministry's view is based on studies that indicate that most of the kerosene consumed by BPL families is used for lighting purpose and wood or cow dung cakes remain the choice of fuels for cooking.

The Centre at present supplies 9-10 million tonnes of subsidized kerosene a year for selling to poor through ration shops controlled by state governments. Several government and independent studies have said nearly 40% of the fuel is diverted for adulteration of motor fuels, giving rise to a black market worth over Rs 16,000 crore at today's market price. Consumers now pay an average of Rs 400 for a cylinder because of a subsidy of Rs 395. The government had last month raised cooking gas price by Rs 50 a cylinder, kerosene by Rs 2 per litre and reduced oil taxes. Still, together with diesel, it expects a subsidy bill of Rs 120,000 crore in 2011-12.

The proposal says the new plan would reduce the government's subsidy burden on cooking gas, estimated at Rs 12,000 crore as per the price prevailing in 2009-10. This would be much higher according to 2010-11 price line.


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6 comments:

suri said...

giving subsidy from the taxes we paid is far better than en-routing these subsidies in form of scams and diverted to politicians swiss bank accounts. is it 16.1kg cylinder really cost 800/- if it is true how pakistan economically below than us able to give petrol to their citizens at 25/- per liter. our country population mostly middle class and salaried people. who thinks about them. they cannot save single pie in these type of atomosphere. they can`t settle any more in their life. for what they will save, whether they can save for their children education, for health for what? no body support them, nor govt. BPL people get every thing, they get houses under rajiv awas yojana, they get subsidies, they get NREG benefits, they get pension, they get reservation every thing, they are not poor, real poor man is middle class common man. we lost humanity in thinking.

vijaykumar said...

Dear Sir, almost all Gas run cars are using domestic LPG cylinders. Secondly, nowadays small family norms are adopted by one and all in India and nobody will have a big family with dozens of children like olden days. So 4 cylinder per year is just sufficient for them year. If in any month due to festival or any function in a house, in that month getting an additional cylinder by paying Rs. 400 extra will not be a big burden.

suri said...

At a difficult time when price rise are out of the roof government should increase the price where in there will be no profit but as it is obvious all the oil companies are making good profit so is center and Delhi Government. This, if stopped the inflation will go down and the people will feel relived.

suri said...

The committee on petrol pricing, headed by former Planning Commission member Kirit Parikh, made out a strong case for removing subsidies on petrol and diesel and reducing them for cooking gas and kerosene. The recommendations include imposition of an additional excise duty of Rs80,000 per diesel car to recover higher subsidy provided to the fuel

preeti said...

At a difficult time when price rise are out of the roof government should increase the price where in there will be no profit but as it is obvious all the oil companies are making good profit so is center and Delhi Government. This, if stopped the inflation will go down and the people will feel relived.

preeti said...

IN ORDER TO ARREST THE SITUATION WHAT WE NEED BY THE GOVT IS TO INCREASE THE PRICE CEILING. OR GOVT CAN SUPPLY THROUGH RATION ESPECIALLY FOR BPL FAMILY SO THAT MAL PRACTICES CAN B AVOIDED.