LPG subsidy only for poor, no respite from record price for others


NEW DELHI: LPG subsidy will be given only to poor households with ‘Ujjwala’ connections and all others will have to pay market price but the government is likely to continue to keep fuel prices in check.
“Subsidies by definition are not designed to get entrenched and increased. Subsidies by definition have to be depressive,” oil minister Hardeep Singh Puri said on Thursday.
Petroleum secretary Pankaj Jain said “no subsidy is paid on cooking gas since June 2020 and the only subsidy that is provided is the one that finance minister Nirmala Sitharaman announced on May 21.”
Last month, Sitharaman announced fuel tax cuts and LPG subsidy of Rs 200 for Ujjwala connection holders, raising hopes of relief among general category consumers. The remaining 21.5 crore general category consumers will have to pay more than Rs 1,000 for a refill.
Under the Ujjwala scheme, nine crore poor households were given LPG connections free of cost. The subsidy will be directly transferred into the connection holder’s account once a refill is booked.
But with a cylinder priced at record Rs 1,003 in Delhi — and higher in other states — many feel the subsidy amount may be too little to improve consumption, which has failed to meet the expected level, of the smokeless fuel among the Ujjwala consumers.
Puri, however, contested this by saying the annual consumption of Ujjwala consumers has grown from 3.01 to 3.68 refills in 2021-22 and the number of connection holders not buying more than one cylinder has come down from 1.8 crore in 2019-20 to 1.08 crore in 2021-22.
On record refill prices, the minister said they have gone up 7% in the last six months, while the benchmark rate — Saudi CP — has risen 43%.
On petrol and diesel prices, Puri said the state-run retailers approach the ministry for relief from under-recovery but the final decision to raise pump prices rests with them as they are “responsible entities”.
Petrol and diesel prices have not been revised since May 22, when excise duty was cut by Rs 8 on petrol and Rs 6 on diesel to ease the inflationary pressures.
As a result, retailers are losing up to Rs 20 per litre of fuel sold and are forced to adjust this loss against refining margins, which is expected to tell on their bottom line.
On Indian state-run oil companies buying stakes in Russian oil and gas projects held by western majors that have announced exit plans, the minister said the government will look into it if “they approach”.


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