An Empowered Group of Ministers has in-principle accepted the interim report of the Task Force on Direct Transfer of Subsidies on Kerosene, LPG, and Fertiliser.

The Ministerial Panel on the financial health of the public sector oil companies, headed by the Finance Minister, Mr Pranab Mukherjee, which met on Monday, was expected to take a call on capping the number of LPG cylinders that the domestic consumers can buy at the subsidised prices.

Beyond this limit the consumers will have to buy at market rates. This is in line with the recommendations of the Task Force.

Mr S. Jaipal Reddy, Petroleum Minister, told newspersons after the meeting that, “The interim report of the task force was accepted at this meeting. LPG issue will be taken up in the next meeting. As regards kerosene there was one suggestion of the EGoM that the Petroleum Ministry and States should discuss the subsidy mechanism.”

At present, domestic LPG (14.2 kg) cylinder is being sold at Rs 395.35 in Delhi, almost Rs 247 lower than the market price. The desired retail price of domestic LPG is Rs 646 a cylinder (Delhi).

The Standing Committee on Petroleum and Natural Gas in its report on Demands for Grant (2011-12) has also suggested that the Government may consider doing away with providing subsidised LPG to persons having an annual income of more than Rs 6 lakh.

For kerosene, the Task Force has mooted a two-phase implementation of the direct transfer of subsidy. PDS kerosene is being sold at Rs 24.93 a litre below the market price.

On petrol pricing, the Minister said, “if the international crude and product prices fall sharply and remain stable at that level only then we would consider reviewing it.”

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