Fiscal Subsidy on Domestic LPG Rs 52,246 crore during 2013-14

The Government has provided fiscal subsidy on Domestic LPG under the notified subsidy schemes, informed the Minister of State (I/C) in the Ministry of Petroleum & Natural Gas Shri Dharmendra Pradhan. In addition to that the Public Sector Oil Marketing Companies (OMCs) are also incurring under-recovery on sale of Subsidized Domestic LPG as its price is being modulated by the Government in order to protect the consumers from impact of high international oil prices and the domestic inflationary conditions. The total subsidy on Subsidized Domestic LPG during 2013-14 is given below:

Main Subsidy 1 Freight Subsidy 2 DBTL3 Under-recovery of OMCs Total Subsidy on Domestic LPG1,904 16 3,868 46,458 52,246Figures in Rs. Crore. PDS Kerosene and Domestic LPG Subsidy Scheme, 2002. Freight Subsidy (For Far Flung Areas) Scheme, 2002. Direct Benefit Transfer of LPG Scheme. Out of Rs. 3868 Crore, Rs. 1337 Crore has been released during 2013-14.

The gross under-recovery incurred by the OMCs on sale of Diesel (in retail), PDS Kerosene and Subsidized Domestic LPG is being compensated through the Burden Sharing Mechanism in the following manner: 

(i) Government through cash assistance.

(ii)Public Sector Upstream Oil Companies namely, ONGC, OIL and GAIL by way of price discount on Crude oil and products.

(iii) OMCs by absorbing a part of the under-recoveries.

(iv)Consumers, by minimal price increase.

Out of the total under recovery of Rs. 1,39,869 crore incurred by the OMCs during 2013-14, Rs. 70,772 crore and Rs. 67, 021 Crore were shared by the Government and upstream oil companies respectively. The balance Rs. 2076 crore was absorbed the OMCs themselves.

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