Gas politics: One subsidised LPG cylinder every month from 1 February

The Union Cabinet on Thursday approved an increase in the number of subsidised domestic LPG cylinders that a household can get in a year from nine to 12. This, after Congress Vice President Rahul Gandhi had on 17 January requested Prime Minister Manmohan Singh to increase the subsidy saying nine cylinders were not sufficient for a household. “A family can get one cylinder every month,” said oil minister Veerappa Moily.

Increasing the subsidy has come at an additional cost of Rs 5,000 crore a year for the government, taking the annual LPG subsidy to Rs 51,000 crore. The government had initially capped the supply of subsidised domestic LPG cylinders to six per household annually in September 2012 in a bid to cut its subsidy bill. The quota was raised to nine in January 2013.

[caption id=“attachment_52711” align=“alignnone” width=“380”]  The Congress decision to raise the LPG cap follows a move in Delhi by the new ruling Aam Aadmi Party, which said it would cut the amount poorer households in the Indian capital need to spend on power by 50%.
Reuters[/caption]

More from Economy

Inflation likely to be a big focus area for budget 2024, say sources Explained: Will the Bank of Japan break tradition and raise interest rates?

The Congress decision to raise the LPG cap follows a move in Delhi by the new ruling Aam Aadmi Party, which said it would cut the amount poorer households in the Indian capital need to spend on power by 50%.

As political parties prepare for national elections scheduled to happen before the end of May, they are wooing voters with more freebies and subsidies. Higher subsidies will make it harder for the government to meet its fiscal deficit target of 4.8% of gross domestic product for the fiscal year which ends on March 31.

“Prime Ministerji, nine cylinders are not enough… the people want 12 cylinders not nine,” Gandhi had said, during an AICC meeting in New Delhi. Immediately after the meeting, MoS in the Prime Minister’s Office V Narayanasamy had said that the government will raise the allocation as Gandhi had made the request and he was the de facto leader of the Congress.

Last week, Oil Minister M Veerappa Moily had said the Cabinet was likely to soon consider increasing the quota of subsidised cooking gas cylinders.

“After our vice president Rahul Gandhi said nine cylinders are not enough, I have moved a Cabinet note to increase the quota to 12. I think the Cabinet is likely to consider the proposal this week,” Moily had said after launching the sale of 5-kg cooking gas (LPG) cylinders at petrol pumps in the national capital.

The move is likely benefit 10 percent of domestic LPG consumers who use above nine cylinders in a year. The minister had said 89.2 percent of the 15 crore LPG consumers use up to nine cylinders in a year and it was only 10 percent of the consumers that have to buy the additional requirement at the market price. If the quota is raised to 12, about 97 percent of the LPG consumers would be covered by subsidised LPG, he said.

With inputs from PTI