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Your kitchen, auto fuel bills set to rise

india Updated: Jan 13, 2014 01:01 IST
hikes in prices

There’s no shaking off the price monster. After a short lull, the next two to three months are expected to bring a series of steep hikes in prices of kitchen and auto fuels with the only comfort being that they will be spread out and not bunched.

The government may increase your annual quota of subsidised LPG (cooking gas) from the present nine cylinders to 12 but may first go in for a one-time hike of anywhere between Rs. 75 and Rs. 100 a cylinder, a top government official told HT on Sunday.

Similarly, a one-time hike in diesel prices of up to Rs. 2 a litre is on the cards, the official added.

That’s not all. With the government approving a new pricing formula for domestically produced natural gas from April 1, you can expect the rates of piped gas (PNG) and CNG to jump. And natural gas being a feedstock for power and fertilizer units, it could also inflate your power bills.

A subsidised LPG cylinder in Delhi costs Rs. 414 while a non-subsidised cylinder comes at a market rate of Rs. 1,258. Increasing the number of cheap cylinders to 12 a year would put an additional fuel subsidy burden of Rs. 3,300-5,800 crore on the government.

“A note for increasing the price of subsidised LPG before increasing the quota to 12 per annum is being prepared for cabinet consideration,” the official said.

Distancing himself from the price hike issue, oil minister M Veerappa Moily, however, confirmed his ministry was examining the pros and cons of hiking the quota but said a decision would be taken “only at the top political level”.

With general elections around the corner, more and more Congress leaders have endorsed the idea of giving households more cheap LPG cylinders in a year — a move they feel will go down well with voters. A team of Congress MPs met Moily last week in this regard. Party vice-president Rahul Gandhi also reportedly took it up with Prime Minister Manmohan Singh.

Moily, however, said he had not heard on the matter from either Singh or Gandhi. He added that 89.2% of the country’s 15 crore LPG consumers use only up to nine cylinders a year and 10% buy the additional requirement at market price. “If the quota is raised to 12, 97% of consumers would be covered by subsidised LPG,” he said.

Increasing CNG and PNG prices, however, would surely prove a bad move for the government in an election year. Delhi has already seen a round of hikes — Rs. 4.5/kg of CNG and Rs. 2/unit of PNG — recently. With domestic natural gas prices expected to go up from the existing $ 4.2 a unit to $ 7-8 under the new pricing formula, the next round of hikes is expected to be steep.