NEW DELHI <http://en.wikipedia.org/wiki/NEW_DELHI>: The government is considering several options to rationalise the subsidy on cooking gas such as excluding income tax payers from getting subsidised cylinders, limiting availability per household and higher prices for urban customers to provide this clean fuel in rural areas.
“Those who can afford must pay the full price, while subsidised LPG should be made available to the poor,” an oil ministry official said adding that the ministry has not set any deadline for pruning the subsidy burden. “There are some implementation issues that we are working out,” he said, requesting anonymity. After freeing pump prices of petrol and diesel, the government is working on rationalising subsidies on cooking gas, or liquefied petroleum gas <http://en.wikipedia.org/wiki/Liquefied_petroleum_gas> (LPG), and kerosene sold trough fair-price shops. On June 26 the government had announced free pricing of both petrol and diesel, but allowed state-owned oil companies the freedom to fix petrol prices only. State-run oil companies are now planning to raise petrol price by 50 paise. They may also get the oil ministry’s nod to raise diesel price by 25 paise, a senior oil company executive said. While announcing petrol and diesel price decontrol in June, the government did not attempt to reform cooking fuel pricing system<http://en.wikipedia.org/wiki/Pricing_system>fearing an adverse political fallout. Currently, the distribution of subsidised cooking gas is biased in favour of urban areas. About 83% of the over 110 million cooking gas connections are currently with urban consumers. The consumer pays about 43% less than the market rate of a 14.2 kg cooking gas cylinder. The balance burden is shared between the government and state-owned oil firms in an ad hoc ratio. A gas refill is currently sold at Rs 345.35 in New Delhi. The central government spent Rs 1,31,025 crore<http://en.wikipedia.org/wiki/Crore>on food, fuel and fertiliser subsidies in the last fiscal and expects to bring down such payments to Rs 1,16,224 crore in 2010-11 and rein in its fiscal deficit to 5.5% of gross domestic product. Explaining the rationale of the proposed move, the oil ministry official said increased availability of cooking gas in rural areas will help the government check diversion of cheap kerosene for adulterating costlier transportation fuel. A litre of kerosene is sold at Rs 12.32 in New Delhi, about Rs 15 a litre less than its market price, while diesel is sold at Rs 37.71 a litre. “Besides, rural people should not be forced to use unhealthy fuel like kerosene and firewood,” he said. Oil ministry is planning to provide 55 million new cooking gas connections by 2015, mostly to rural households. It plans to appoint over 2,000 additional dealers in rural India<http://topics.nytimes.com/top/news/international/countriesandterritories/india/index.html>under the Rajiv Gandhi Gramin LPG Vitrak Yojana by 2010. http://economictimes.indiatimes.com/news/news-by-industry/energy/oil--gas/Pay-more-for-LPG-if-you-pay-tax-or-live-in-a-city/articleshow/6588344.cms -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
