Centre orders LPG price to be hiked by Rs 4 every month to remove all subsidy
The government had previously asked Indian Oil, Bharat Petroleum and Hindustan Petroleum to raise rates of subsidised domestic LPG by Rs 2 per 14.2-kg cylinder per month (excluding VAT).business Updated: Jul 31, 2017 22:39 IST
Union petroleum and natural gas minister Dharmendra Pradhan ordered state-run oil companies on Monday to raise subsidised cooking gas (LPG) prices by Rs 4 per cylinder every month to eliminate all the subsidies by March.
Pradhan in a written reply in the Lok Sabha said, “Public sector oil marketing companies (OMCs) were authorised to increase price of subsidised domestic LPG cylinder by Rs 2 per cylinder (14.2-kg) per month (excluding VAT) with effect from July 1, 2016”.
Oil companies had increased LPG rates on 10 times since that go-ahead.
“The government vide its order dated May 30, 2017, has again authorised OMCs to continue to increase the effective price of subsidised domestic LPG by Rs 4 per cylinder effective June 1, 2017, per month (excluding VAT) till the reduction of government subsidy to ‘nil’, or till March 2018, or till further orders, whichever is earliest,” he added.
The government had previously asked Indian Oil (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) to raise rates of subsidised domestic LPG by Rs 2 per 14.2-kg cylinder per month (excluding VAT).
Now, the quantum has been doubled so as to bring down the subsidy to nil. Every household is entitled to 12 cylinders of 14.2-kg each at subsidised rates in a year. Any requirement beyond that is to be purchased at market price.
Oil companies have raised rates twice since then, the last being on July 1 when rates were up by a steep Rs 32 per cylinder — the steepest increase in six years. This hike was because of the May 30 order as well as reflection of hiked tax rates under the Goods and Services Tax regime.
First Published: Jul 31, 2017 22:08 IST