Persons having an annual income of more than Rs 6 lakh may not get subsidised cooking gas, if the suggestion of the Standing Committee on Petroleum and Natural Gas has its way.

Currently, domestic LPG (14.2 kg) cylinder is being sold at Rs 395.35 in Delhi, almost Rs 247 lower than the market price. According to the estimates of the public sector oil marketing companies (OMCs), the desired retail price of domestic LPG is Rs 646 a cylinder (Delhi).

The committee's report on Demands for Grant (2011-12) for the Ministry tabled by its Chairman, Mr Aruna Kumar Vundavalli, in the Lok Sabha on Wednesday says that “…the Government may consider doing away with providing subsidised LPG to rich and affluent people having an income of more than Rs 6 lakh per annum including those holding constitutional posts, public representatives like members of Parliament, MLAs/MLCs (member of legislative assembly/legislative council).”

This, says the committee, will help offset the huge losses made on account of subsidy on the one hand, and help expand the subsidised LPG distribution to the rural people who are more in need of clean fuel, on the other.

The committee said it should be apprised of the concrete action taken in this regard within three months.

The Government incurred an expenditure of Rs 2,770 crore in 2009-10 and Rs 2,904 crore in 2010-11 under the ‘PDS Kerosene and Domestic LPG Subsidy Scheme, 2002'. It provides a subsidy of Rs 0.82 a litre on PDS kerosene and Rs 22.58 for every cylinder of domestic LPG (at the one-third level of the rate of 2002-03) from the Budget to OMCs. The Oil Ministry had informed the committee that there is a proposal under consideration that envisages restricting subsidised domestic LPG for all consumers to maybe four cylinders. Beyond four cylinders, the consumers can buy at market rates.

This was in sync with the recommendations of the Task Force on Direct Transfer of Subsidies on Kerosene, LPG, and Fertiliser.

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