Govt may replace LPG subsidy with cooking subsidy for the benefit of more consumers
Niti Aayog is working on a proposal to replace LPG subsidy with cooking subsidy in a bid to extend the benefit to people using piped natural gas and biofuels for cooking purposes. Niti Aayog Vice Chairman Rajiv Kumar while speaking to PTI said that subsidy should be applicable for all fuels that are used for cooking.
At present, the government gives subsidy to users of Liquefied Petroleum Gas (LPG).
In an interview to PTI, Kumar said: "LPG is a specific product, a subsidy should be for larger set of all products/ fuels which are used for cooking. (For) all fuels which are used for cooking, subsidy should be applicable. Because if there are some cities where PNG (Piped Natural Gas) is used, then it is only logical that the subsidy be extended to them also."
Niti Aayog Chairman's statements came against the backdrop of apprehensions in certain quarters that subsidy only for LPG users is inhibiting the adoption of clean and cheap fuels such as biofuels in rural areas and PNG in urban areas.
The changes related to cooking subsidy are likely to be incorporated in the draft National Energy Policy 2030. The draft was made public last year. After inter-ministerial consultations, the policy would be taken up by the Cabinet.
All LPG consumers have to buy fuel at market price. However, the government subsidises 12 cylinders of 14.2 kilogram each per household in a year by directly transferring the subsidy amount to the users' bank accounts. A non-subsidised cylinder costs Rs 781.
Reports suggest that in last two month, LPG subsidy has jumped by over 60 per cent as the government maintains price line despite rising international rates. In May, the subsidy amount transferred in bank accounts was Rs 159.29 per cylinder. However, the amount was raised to Rs 204.95 in June and to Rs 257.74 per cylinder this month.
Indian Oil Corp Chairman Sanjiv Singh said the higher subsidy was meant to keep rates of subsidised LPG in check.
International rates of LPG, which was used as a benchmark for pricing of domestic fuel, have been on the run since June. Non-subsidised or market priced LPG price was Rs 653.50 per 14.2-kg bottle in the national capital in May, which rose to Rs 698.50 (Rs 48 per cylinder) in June.
(With inputs from PTI)