Proposal to make LPG costlier for the rich | india | Hindustan Times
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Proposal to make LPG costlier for the rich

Minister of state in the PMO has questioned the practice of providing subsidised LPG to all, including the affluent sections of society, reports Deepak Joshi.

india Updated: Jan 18, 2007 03:15 IST

Prithviraj Chavan, minister of state in the Prime Minister's Office, has mooted dual pricing for domestic liquefied petroleum gas (LPG) and questioned the practice of providing subsidised LPG to all, including the affluent sections of society.

"There is a case for better targeting of LPG subsidy," Chavan said on Wednesday on the sidelines of 'Petrotech 2007' summit. "The present subsidy of
Rs 150 per cylinder should not be availed of by the well-off."

The minister also proposed a fixed subsidy on LPG cylinders. "There can be a system by which a subsidy of Rs 150 per cylinder can be fixed, and the overall price floated with respect to international prices," he said.

Public-sector oil companies face under-recoveries of Rs 20,000 crore annually because LPG is sold below its cost price. The price of LPG has been maintained at the 2004 level.

Chavan stressed the need to de-politicise the issue of fixing oil prices and said a regulator could decide the price of petroleum products, as well as matters of subsidy and the quantum of cross subsidy.

"The decision to revise petroleum product prices should not become a politically sensitive issue," he said. "Why should it be referred to the cabinet?"

Email Deepak Joshi: djoshi@hindustantimes.com