OIL & GAS

Oil Ministry mulls reinstating subsidised LPG prices, survey in progress

The Ministry of Petroleum and Natural Gas is evaluating a threshold at which the subsidy on Liquefied Petroleum Gas (LPG or cooking gas) will be reinstated. According to a senior government official in the know, a survey is currently being conducted to determine the price at which maximum consumers will keep buying domestic cylinders. One of the options also being considered is to limit any subsidy disbursal only to Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries.

This was needed after global LPG prices collapsed and the government eliminated LPG subsidy in May 2020. A domestic 14.2 kg LPG cylinder cost Rs 581.50 apiece in the national capital during the time. The price has steadily risen since but LPG subsidy has not been resumed. A domestic LPG cylinder now costs Rs 884.50 apiece in Delhi, the highest ever price for a ‘subsidised’ LPG cylinder.

While there is nil subsidy on a domestic cylinder in Delhi, the centre continues to subsidise freight costs in some states. The exact quantum of subsidy in each case varies, but it is largely less than Rs 30 apiece. This is being done to bring some uniformity in the effective price of a domestic cylinder across the country.

Source
business standard
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