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Govt looking into demand to remove cap on subsidised LPG cylinders

Posted on Nov 23, 05:02PM | UNI

The Government today said it was looking into the representations made to it for revising its decision to cap the subsidised LPG cylinders at 6 per year.

As per the decision of the Cabinet Committee on Political Affairs, the cylinders beyond the cap would be available at market rate to be notified by the Public Sector Oil Marketing Companies on monthly basis.

In a written reply to a question, Petroleum and Natural Gas Minister Veerappa Moily said in the Lok Sabha today that OMCs were suffering from under-recoveries as the Government continued to modulate the retail selling price of subsidised Domestic LPG so that the common was insulated from the impact of rise in international prices and domestic inflationary conditions.

During 2011-12, the OMC incurred under-recovery of Rs 1,38,541 Crore on sale of dielsel, PDS kerosene and domestic LPG.

These companies need to be compensated in order not only to maintain their financial health but also to allow them to generate resources for capital expenditure, modernisation and acquisition of assests for future growth, said Mr Moily.

So in September last, the Government decided to restrict the supply of subsidised LPG cylinders. However, he said the base price of subsidised cylinders(of 14.2 kg) per annum not revised, and the increase of Rs 11.50 per cylinder from October 5/6 this year was on account of the distributors' commission, said the Minister.