Oil Ministry raises concerns over plans to raise LPG cap

Moily said such a move would have cascading effect on inflation and fiscal deficit.

The Petroleum Ministry today expressed concerns over the plans to increase the cap on subsidised LPG from nine to 12 saying that it may have an impact on the under-recovery figures, saying that a final decision would be taken by the Cabinet.

Petroleum minister M Veerappa Moily said today: "When we increased the number of cylinders from six to nine, at least 90% of our customers were covered. If it gets increased by three more 97% of the customers would be covered . However, this will tell upon the under-recovery figures. It has to be reimbursed by the finance ministry and public sector undertakings. A final call will be taken by the cabinet."

He added that the move would have cascading effect on inflation and fiscal deficit.

The Congress vice president Rahul Gandhi had met Prime Minister Manmohun Singh demanding an increase in the cap on subsidized LPG cylinders.