The government plans to quickly put in place a mechanism to
cap the number of subsidized LPG cylinders for a household to 6-8 per year.
R.P. Singh, minister of state for petroleum and natural gas,
today said in Bangalore that the government was close to taking a decision on
limiting the availability to the “economically not weaker” sections to bring
down the subsidies by up to Rs 10,000 crore annually.
The oil ministry had sent the proposal to the empowered group
of ministers, and then headed by Pranab Mukherjee. After Mukherjee’s
resignation as the finance minister, the government has not set up any panel to
review fuel subsidies.
Oil ministry officials said, “One would have to wait to see
whether another panel or a committee is set up on the issue.”
Singh said a lot of people who were “not economically weaker”
get the benefit of the subsidy on cooking gas that costs the exchequer a sum of
more than Rs 30,000 crore.
The subsidy per cylinder is around Rs 319, and the oil
marketing companies supply around 32 lakh cylinders a day. The government
expects to run a subsidy bill of Rs 36,000 crore this fiscal on cooking gas, up
from Rs 30,000 crore in 2011-12.
A 14.2kg domestic cylinder is priced between Rs 393 and 405,
while the 19.2 kg commercial cylinder costs Rs 1,300-1,500. The huge price
difference often leads to the diversion of domestic cylinders for commercial
purposes.
Singh also said the government was looking at a partial decontrol
of diesel prices in a manner that it did not result in a cascading effect on
the economy.
“If you try to raise the price of diesel, it has a cascading
effect on the economy. We are trying to work out a solution where it impacts
the economy in the least manner but also brings down the fiscal deficit,” he
said.
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