Monday, 20 January 2014

Subsidised LPG cylinder quota to be increased to 12 per household: Oil Minister

Giving some respite to Indian households, Oil Minister M Veerappa Moily stated that the quota of subsidised cooking cylinders will be hiked to 12 from 9 per household. Oil Ministry will soon move the proposal to Cabinet Committee on Economic Affairs (CCEA) for consideration.

At present, 89.2 percent of the 15 crore Indian LPG consumers use up to nine cylinders in a year and only 10 per cent have to buy the additional requirement at the market price. If the LPG subsidy quota is increased to 12, about 97 percent of the LPG consumers would be covered by subsidised LPG. Under the Direct Benefit Transfer for LPG (DBTL) scheme, which was rolled-out in country’s 289 districts, cooking gas consumers get subsidized advance money in their bank accounts to help them purchase a 14.2-kg LPG cylinder at market price. At present, the subsidised LPG cylinder costs Rs 414 while the market price per bottle comes to Rs 1,258.

However, the proposal to increase the number of subsidised cylinders will put pressure on the government’s fiscal position with additional fuel subsidy burden of Rs 3,300 crore-5,800 crore. India's fiscal deficit reached to Rs 5.1 lakh crore or 94% of the targeted budgetary estimate of Rs 5.42 lakh crore in the April-November period of current fiscal. Earlier, in order to cut the LPG subsidy, the government had initially capped the supply of subsidised domestic LPG cylinders to six per household and then raised the quota to nine in the previous year.

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