Subsidised LPG consumption last fiscal grew at the highest pace in a decade: IISD

India’s consumption of subsidised liquefied petroleum gas grew 18 per cent last financial year, the highest annual growth rate recorded in the past decade, International Institute of Sustainable Development has said. At the same time, consumption of unsubsidised LPG fell 19 per cent, the largest fall recorded in more than 10 years. The Canada-based independent research body attributed the huge rise to the failure to reinstate a realistic per household quota.

The cap on subsidised consumption was initially set at six per household in September 2012, before subsequently being raised to nine per household in January 2014 and 12 per household in January 2015.

“Provisional Ministry of Petroleum and Natural Gas (MoPNG) data indicates that in financial year 2014-15, total subsidised consumption increased by 18 per cent or 166 million cylinders (the largest increase recorded),” IISD has said in its latest data brief on ‘Recent Trends in LPG Consumption in India’.

In 2014-15, total LPG consumption grew by over 10 per cent relative to the growth rate of 4.7 per cent in the previous financial year (2013-14), IISD said, adding this significant increase in overall LPG consumption was due almost entirely to a sharp rise in the consumption of subsidised household LPG in 2014-15.

This sharp rise in subsidised consumption did not lead to an increase in full-year LPG subsidy expenditure due to the rapid fall in international crude oil prices in the second half of 2014-15. The oil marketing companies’ total under-recoveries on subsidised sales of all petroleum products dropped 48 per cent to Rs 72,000 crore in 2014-15. Losses on subsidised LPG sales dropped 22 per cent to Rs 36,000 crore during the year.

Total unsubsidised consumption decreased by 19 per cent (or 43 million 14.2 kg cylinders) in 2014-15, the largest decrease in the last decade.

According to IISD, breakdown of the unsubsidised consumption by sub-category (commercial, domestic, bulk and transport) demonstrates that the large fall in total unsubsidised consumption was due almost entirely to a collapse of over 50 per cent in the consumption of unsubsidised domestic LPG.