New Delhi: The government has doubled the quantum of the monthly increase in domestic LPG cylinder price to Rs 4. The decision is aimed at hastening the end of the subsidy regime for the kitchen fuel as the gap with market price shrank to Rs 86.54 for each refill in June amid an extended period of low global oil prices.
Since June, state-run fuel retailers have started raising the price of refills by Rs 4 every month. Until then, retailers had been raising the price by Rs 2 every month since a July 2016 order from the oil ministry.
In May, the ministry ordered retailers to double the quantum of monthly increase to Rs 4 to speed up elimination of the subsidy.
With oil prices expected to remain low, the higher quantum of monthly hike could wipe out the subsidy sooner if oil prices fall further.
Households eligible for the LPG subsidy are at present entitled to buy, every year, 12 cylinders of 14.2kg at subsidised rates, and have to pay the market rate for refills bought beyond this cap.
Currently, a subsidised LPG cylinder costs Rs 477.46 each in Delhi, while it was Rs 419.18 in June 2016. A non-subsidised domestic cylinder, which consumers buy after exhausting their subsidy quota, costs Rs 564.
“The government… has authorised OMCs to continue to increase the effective price of subsidised domestic LPG by Rs 4 per cylinder effective June 1, 2017, per month (excluding VAT) till the reduction of government subsidy to ‘nil’, or till March 2018, or till further orders, whichever is earliest,” oil minister Dharmendra Pradhan said in a written reply in the Lok Sabha on Monday.
Credit: Timesofindia.indiatimes.com
