Govt wants rich to give up subsidised LPG | business | Hindustan Times
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Govt wants rich to give up subsidised LPG

The government may soon come out with a scheme urging affluent consumers to volunteer against buying subsidised cooking gas (LPG) cylinders that are currently being retailed at almost Rs 300 less than market rates. HT reports.

business Updated: Dec 12, 2011 23:32 IST
HT Correspondent

The government may soon come out with a scheme urging affluent consumers to volunteer against buying subsidised cooking gas (LPG) cylinders that are currently being retailed at almost Rs 300 less than market rates.

The idea is to replicate what happened some years back, when people who could afford it stopped buying food grains from public distribution system (PDS) despite having ration cards. A 14.2-kg LPG cylinder costs Rs 399.26 in Delhi and Rs 398.45 in Mumbai. Oil firms lose about Rs 75 crore per day on selling the fuel below its market price of Rs 686.26.

Petroleum ministry officials said that under the scheme, modalities of which are still being worked out, it is proposed to first ask the ministers, members of Parliament, bureaucrats and the senior management of public sector companies to give up subsidised LPG voluntarily.

Taking the cue, other sections like corporate honchos and businessmen who can afford market price would then also be asked to give up subsidised LPG.

Taking the lead, the minister of state for petroleum, RPN Singh said, “I will be the first person (to give up subsidised LPG) the day the scheme comes into being.” “Subsidised domestic LPG was meant only for the poor and the needy and the rich should take the initiative voluntarily to give up subsidised LPG.”

The minister said modalities of how his suggestion can be implemented are being discussed within the petroleum ministry and with stakeholders before it is implemented.

One way could be that affluent continue buying subsidised LPG and pay the difference between the market price to the oil companies directly through cheques. The other way would be that the rich start buying the blue-coloured 19-kg cylinders that are currently being sold at market price.

Singh said the fuel subsidy bill for 2011-12 fiscal is projected at Rs 1,32,000 crore and such bold moves are needed to cut this down. Besides LPG, diesel is also sold at discounted rates, with the difference between the retail price and the market price being Rs 13.53 per litre, while kerosene is sold at a discount of Rs 29.99 a litre. “We need to do away some subsidies... a lot of people do not need subsidies in LPG,” he said.