Cabinet decision on 12 subsidised LPG cylinders this week

Petroleum Minister M. Veerappa Moily Tuesday said the union cabinet will this week consider raising the annual limit of subsidised cooking gas (LPG) cylinders to 12 from nine per household.

"After our (Congress) vice president Rahul Gandhi said nine cylinders are not enough, I have moved a cabinet note to increase the quota to 12. I think the Cabinet is likely to consider the proposal this week," Moily said after launching the sale of 5 kg LPG cylinders at petrol pumps in the national capital.

Raising the annual limit to 12 cylinders would mean an additional fuel subsidy burden of Rs.3,300 crore-Rs.5,000 crore. The current subsidy quantum on LPG is around Rs.46,000 crore per annum.

Moily said 89.2 percent of the 15 crore LPG consumers use up to nine cylinders a year, while only 10 percent have to buy their additional requirements at market prices. A subsidised 14.2 kg LPG cylinder costs Rs.414 in Delhi.

If the quota is raised to 12, about 97 percent of consumers would be covered by subsidised LPG, he added. The quota was raised to nine cylinders in January 2013.

"We import 40 percent of our LPG," the petroleum minister said,

Saying that the sale of 5 kg cylinders, now available at petrol pumps in 24 cities, will be extended all over the country, Moily explained that customers can walk into a petrol pump with an ID proof to buy a 5 kg cylinder at a cost of Rs.585.

The 5-kg cylinder scheme is designed to benefit the migratory populations like students and BPO employees, as well as people with odd work hours, because petrol stations are open for longer hours than LPG dealers.

First-time purchase of a 5 kg cylinder will cost Rs.1,000, while a cylinder regulator will be available for Rs.250, both excluding taxes. The initial cost includes a security deposit. Subsequent refills will be available at market rates.