No decision has been taken to limit the number of LPG cylinders for each household. This information was given by the Minister of State for Petroleum & Natural Gas, Mr R.P.N.Singh, in the Rajya Sabha on Tuesday.
At present, the subsidy on account of domestic LPG is unlimited, as there is no restriction on the number of refills supplied to a household.
Responding to a question on whether the Ministry has worked out a proposal to limit the number of LPG cylinders for each household to seven per year, the Minister said, “A proposal was worked out to restrict the number of cylinders to be supplied at subsidised rates to registered customers of domestic LPG but no final decision has been taken yet.”
Some public representatives have raised concerns over the proposal to restrict the number of subsidised refills, the Minister said. “On the other hand, the Standing Committee on Petroleum & Natural Gas (2010-11) on Demands for Grants (2011-12), in its report, has recommended that in order to restrict the increasing burden of subsidy, supply of the domestic LPG refills should be done away with rich and affluent people with an annual income of Rs 6 lakh and above, including those holding constitutional posts, public representatives like MPs, MLAs / MLCs,” he added.
This proposal was placed before the Empowered Group of Ministers on Under-recoveries of the Oil Marketing Companies for consideration, in its meeting held on August 8, 2011, however, the item was deferred, Mr Singh said.
The Government is administering “PDS Kerosene and Domestic LPG Subsidy Scheme, 2002” and providing subsidy of Rs 0.82 a litre on PDS kerosene and Rs 22.58 for every cylinder of domestic LPG from the fiscal budget to the public sector oil marketing companies. Further, the Government also modulates the price of domestic LPG, PDS kerosene, and diesel, to protect the consumer from the inflationary impact of rising international oil prices. As a result, the oil companies incur under-recoveries on sale of these products.
In addition to the fiscal subsidy, under the burden sharing mechanism being followed, the under recoveries on these products are partly compensated by the Government, domestic upstream oil companies through price discounts to oil marketing companies, and remaining portion is borne by oil marketing companies themselves.