Minister for Petroleum and Natural Gas M. Veerappa Moily on Tuesday said that the Government this week would increase the cap on subsidised domestic cooking gas to 12 refills annually.

Currently, every customer gets nine refills at a subsidised rate.

“After Congress Vice-President Rahul Gandhi floated the idea, I have approached Cabinet to increase the cap,” Moily said.

He further added that 97 per cent of population would be covered with 12 subsidised refills per year.

The Ministry reiterated that by using the Aadhaar-linked mechanism for direct transfer of subsidy to bank accounts, the Government can save around Rs 12,000-15,000 crore.

“This can be given back to consumers by way of reducing cost.”

Aadhaar link

However, making the Aadhaar-linked mechanism compulsory to receive subsidy is being contested.

States such as Kerala has said that Aadhaar would not be mandatory to receive subsidies.

Increasing the subsidy to 12 refills would burden the Government with an additional subsidy of Rs 4,000 crore taking total subsidy bill for LPG to Rs 50,000 crore.

The Government is incurring a total loss of Rs 1,40,000 crore for selling petroleum products below market cost, added Moily.

5-kg cylinder

Meanwhile, the Government unveiled 5-kg LPG cylinders in the Capital. They would be available across 18 petrol pumps in Delhi and the National Capital Region.

However, the 5-kg cylinders would not be subsidised. At current rates, each refill would cost Rs 585, which would vary with the change in market prices of LPG.

A customer would be able to procure these mini-cylinders from petrol pumps with just a proof of identity, such as PAN card or telephone bill.

A first time buyer would have to pay around Rs 1,500 that would include the cost of the cylinder and regulator.

(This article was published on January 21, 2014)
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