Govt asks OMCs to Dou­ble LPG Cylin­der Price Hike to Speed Up Elim­i­na­tion of Sub­si­dies

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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

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