Restricting the number of subsidised LPG cylinders to four a year — a proposal likely to be considered by the Empowered Group of Ministers (EGoM) on Friday — will bring down the government's annual subsidy burden by Rs12,629 crore.
The government's contribution towards subsidising LPG cylinders stood at Rs23,746 crore in 2010-11 and it is likely to touch Rs29,011 crore in this fiscal.
Consumers of LPG cylinders are now paying Rs270 less on every cylinder. "Around 20% of customers, including the BPL households, consume less than four refills per year. Thus BPL households remain unaffected with a limit of four subsidised refills per year," government sources said.
The government is expected to review prices of gas cylinders on a monthly basis if the EGoM gives nod for capping the number of subsidised cylinders.