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HindustanTimes Sat,19 Apr 2014

Cabinet panel may clear plan to raise cap on cheap LPG today

Anupama Airy, Hindustan Times  New Delhi, January 19, 2014
First Published: 23:39 IST(19/1/2014) | Last Updated: 07:39 IST(20/1/2014)

Working over the weekend amidst hectic parleys, petroleum ministry officials have readied the much-talked about Cabinet note for raising the number of subsidised LPG cylinders from nine to 12 a year.

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“The proposal to increase the cap to 12 cylinders a year has been readied and may either come up before the Cabinet Committee on Economic Affairs (CCEA) on Monday or sometime during the week before the Cabinet Committee on Political Affairs (CCPA),” a senior petroleum ministry official told HT.

The move comes within two days of Congress party vice-president Rahul Gandhi making a strong pitch at the AICC session on Friday for raising the quota of subsidised cooking cylinders from nine to 12 per household.

The increase in quota is likely to result in an additional subsidy burden of over `4,000 crore for the government, officials said.

A subsidised LPG cylinder in Delhi costs `414, while a non-subsidised cylinder comes at a market rate of `1,258 per cylinder.

State-owned oil companies, however, are not too enthusiastic.

“If the quota is raised to 12 cylinders a year, 97% of consumers would be covered by subsidised LPG,” a senior oil company official said, citing the findings of a report, which had said that 90% of the country’s 15 crore LPG consumers use only 9 cylinders a year and only 10% buy the additional requirement at market price.

With a view to reducing its subsidy burden, the government had initially capped the supply of subsidised domestic LPG cylinders to six per household for a year in September 2012. The annual quota was raised to nine in January 2013.

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