Cabinet to take up raising of LPG cap this week

Move follows Rahul Gandhi's pressure to go for it eyeing the upcoming Lok Sabha election

The Union Cabinet is likely to take up the proposal an increase in the cap for subsidized liquefied petroleum gas (LPG) to 12 from the present nine, following the Congress vice president Rahul Gandhi’s pressure to go for it eyeing the upcoming Lok Sabha election.

“I think the Cabinet is likely to consider the proposal this week,” Petroleum minister M Veerappa Moily told the media today.  Addressing an AICC meeting last week, Gandhi had said, “I want to tell the Prime Minister, nine cylinders are not enough. We need 12 cylinders, India’s women need 12 cylinders”.  The move may increase the under-recovery figures by Rs 3,600 crore. However, ministry sources confirm that this would cover 99 per cent of the LPG consumers, out of the total 15 crore.

The government had put a cap on subsidized LPG cylinders to six on September 2012, in order to keep a tab on the rising subsidy burden. However, following political pressure, they had to again increase the cap to nine in January 2013. The prices of non-subsidised cylinders now stand at Rs 1,258 per cylinder, compared to the subsidized rate of Rs 414 per cylinder in Delhi.  Oil marketing companies are expected to suffer an under recovery of around Rs 1.4 lakh crore during the current financial year.

Meanwhile, the government today launched 5 kilo gram LPG cylinders through petrol pumps. “This scheme will serve the emerging segment of new consumers like IT professionals, BPO employees amongst others who want LPG cooking gas, but in absence of proper proof of address cannot get the same through regular LPG distributors,” the ministry said in a statement today.   

The scheme allows sale of 5 Kg LPG cylinder at commercial rate with just a proof of Identity (POI).  The first-time customers will be charged Rs 1000-plus applicable taxes for the cylinder and Rs 250-plus applicable taxes for regulator.  The cost of the product and refill will be as per the market rate which will vary from time to time.