CCEA extends domestic LPG and PDS kerosene subsidy by one year

Our Bureau New Delhi | Updated on March 04, 2015 Published on March 04, 2015

The Cabinet Committee on Economic Affairs (CCEA) approved the extension of PDS Kerosene and Domestic LPG Subsidy, 2002, and Freight Subsidy (for far-flung areas) Scheme, 2002, up to March 31, i.e. by one year.

The move will likely help reduce the under-recovery of oil marketing companies, said an official statement late Wednesday evening.

A subsidy of Rs. 22.58 per 14.2 kg. LPG and Rs. 0.82/litre on kerosene sold through the public distribution system was being provided under the scheme. The freight subsidy was being provided to consumers in far-flung areas. Both schemes had ended on March 31, 2014.

Last month, the Centre had deregulated the sale of non-PDS kerosene to check black-marketing of the fuel sold through the PDS. Market-priced kerosene sells for Rs.27.68/litre while PDS kerosene costs Rs. 15.14/litre. 

India consumed 7.1 million tonnes of kerosene in 2013-14 and with stagnant domestic prices, OMCs’ under-recoveries on the fuel had swelled to Rs.1.39 lakh crore in the previous financial year. It is estimated that OMCs are losing Rs.13.32 on every litre of kerosene.

Published on March 04, 2015
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