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Govt to change prices of LPG cylinders again? Internal assessment shows consumers ready to pay Rs 1,000 per refill

12:06 PM Sep 24, 2021 | FPJ Web Desk

It's not just rising fuel prices people have to worry about, but a major development may be around the corner related for subsidies on LPG cylinders. According to a report by Zee News, the Central government may be planning changes to the scheme related to the subsidy on LPG cylinders.

As per the report, an internal assessment by the government has shown that consumers of LPG cylinders are willing to pay Rs 1,000 per cylinder. This may be an indication that the government is planning yet another hike in the prices of gas cylinders.

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The government may take two stances regarding LPG cylinders, according to sources cited by Zee News. First, the government starts supply of cylinders without subsidy. Second, some selected consumers get the benefit of the subsidy.

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So far nothing has been clarified by the government yet, but the report suggests that the government might put a cap on subsidies. The report says that families with an income of Rs 10 lakh or more won’t be able to apply subsidies. While the beneficiaries of the Ujjwala scheme will get the benefit of the subsidy.

For the past several months, the Central government has stopped subsidies on LPG since May 2020. This step was taken after the prices of crude oil and gas in international markets plummeted during the COVID-19 pandemic.

But the subsidies by the government haven’t completely stopped. The subsidy outgo, i.e, the Direct Benefit Transfer (DBT) on LPG for FY21 was Rs 3,559 crore as against Rs 24,468 crore in FY20, reported CNBC.

Meanwhile, the prices of Liquefied Petroleum Gas (LPG) cooking gas cylinders across all categories including subsidised gas on September 1 were hiked by Rs 25 per cylinder -- the third straight increase in rates in less than two months. Subsidised as well as non-subsidised LPG now costs Rs 884.50 per 14.2-kg cylinder in Delhi, according to a price notification of oil companies.

While, the price of 14.2 kg LPG cylinder in Mumbai is currently fixed at Rs 884.50 and in Chennai at Rs 900.50.

This is the third straight increase in prices in less than two months. Subsidised and non-subsidised LPG rates were hiked by Rs 25.50 per cylinder on July 1.

Non-subsidised LPG rates rose by Rs 25 per cylinder on August 1 and by the same proportion on August 18.

The government policy provides for the supply of 12 cylinders of 14.2-kg each per household at subsidised or below-market rates. Any quantity over this had to be bought at market price or non-subsidised rates.

The price of domestic cooking gas has more than doubled in the last seven years. The retail selling price of domestic gas was Rs 410.5 per 14.2-kg cylinder on March 1, 2014.

(With inputs from Agencies)

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