Govt asks OMCs to Double LPG Cylinder Price Hike to Speed Up Elimination of Subsidies
Mumbai: The government has asked state-owned oil marketing companies to raise cooking gas prices by ₹ 4 every month until the entire subsidy — about ₹ 87 for a 14.2 kg cylinder in Delhi — is wiped out. The government has already removed price controls on most fuels. For cooking gas, it undertook the ‘Give It Up’ campaign and had earlier authorised oil marketing companies (OMCs) to increase the price of subsidised LPG cylinders by ₹ 2 a month. It has now doubled the amount to accelerate elimination of subsidy.
“The government in its order dated May 30, has again authorised OMCs to continue to increase the effective price of subsidised domestic LPG (14.2 kg cylinder) by ₹ 4 per cylinder effective from June 1, per month (excluding VAT as applicable in different states/union territories) till the reduction of government subsidy to ‘nil’, or till March 2018, or till further orders, whichever is earliest,” oil minister Dharmendra Pradhan told Parliament.
The price for the other subsidised cylinders, such as those of 5 kg capacity, would be increased proportionately.
As on July 1, India had 18.12 crore subsidised LPG cylinder customers, of which, 2.5 crore customers are poor women who got connection under the Pradhan Mantri Ujjwala Yojana in the last one year. The number of non-subsidised consumers stands at 2.66 crore.
Pradhan said that prices of LPG is revised on monthly basis and subsidy on LPG varies from market to market based on the retail selling price. The subsidy amount on a 14.2 kg cylinder transferred to the account of a consumer in Delhi, for the month of July 2017, was ₹ 86.54.
“The subsidy fluctuates and was low in July, while it is expected to increase to ₹ 100 in August. Even if we start increasing the prices by ₹ 4 a cylinder, it is unlikely that it would be eliminated by March,” a senior executive with one of the state-run OMCs told ET.
The price of subsidised LPG has already increased to over ₹ 477 for the 14.2 kg cylinder in Delhi in July, from ₹ 419 in June last year.
The earlier hike was 2 per month