Tuesday, 4 December 2018

Govt might revert to old LPG cylinder system

The government is planning to revert to the old system of giving cooking gas (LPG) cylinders to households on subsidised rates like pre-2013-14 when subsidy to bank accounts was not in practice.

The move is not only expected to reduce the
cost of LPG cylinders significantly for consumers but also help the government hugely in next year's general elections. There are above 24 crore households in the country using LPG at present and the number is expected to go up to 36 crore in the next 12-18 months.

Most of the cooking gas beneficiaries are from rural and semi-urban areas, which constitute a large vote bank for any government. But, in the past as many months, the prices of LPG cylinders have skyrocketed due to higher import duty payout. Subsequently, the Centre received complaints of beneficiaries in rural areas switching back to traditional cooking fuels like cow-dung cakes and wood.

The official gas consumption data shows slowing per capita consumption of LPG as compared to the growth in LPG connections that reached nearly 24 crore by June-July.

An LPG refill till last month cost over Rs 900 in Delhi and surrounding areas for all consumers until the prices were cut by a steep Rs 133 per refill following softening of international benchmark LPG rate and the dollar-rupee exchange rate.

LPG consumers have to buy the fuel at market price. The government subsidises 12 cylinders of 14.2 kg each per households in a year by providing the subsidy amount directly to the bank accounts of users. Consumers have also complained that they have not received LPG subsidies in their accounts for months.

Sources said that the petroleum ministry, along with finance and other ministries, is devising ways to revert to the earlier practice so that consumers are not hurt.


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