NO INCREASE IN LPG AND KEROSENE PRICES THIS YEAR
SUBSIDY
PHASE OUT PERIOD EXTENDED TO 5 YEARS
The Cabinet, in its
meeting of 11-09-2003, deliberated upon the issue of pricing of
PDS Kerosene and Domestic LPG and decided that the selling prices
of these products will not be increased by the oil marketing companies
during the current financial year. Shri Ram Naik, Minister of
Petroleum and Natural Gas, announced this at Indore today while
inaugurating the Manmad-Indore pipeline of Bharat Petroleum Corporation
Ltd. (BPCL). The resultant under-recoveries to the oil marketing
companies on this account would be shared from within the oil
sector companies. The Ministry of Petroleum and Natural Gas would
work out details in this regard.
Shri Naik further
announced that the Cabinet also decided to increase the phasing
out period for subsidies on these products from three years to
five years with effect from 1st April 2002 i.e. the
subsidies will now be available upto 31.03.2007.
Shri Naik informed
that this decision of the Government would benefit consumers of
these sensitive products of mass consumption as otherwise it would
have necessitated the increase in price of PDS kerosene by Rs.
3.03 per litre and in that of LPG by Rs. 106.30 per cylinder at
Delhi prices. After the dismantling of Administered Pricing Mechanism
(APM) in the petroleum sector effective 1st April 2002,
as per the subsidy scheme earlier notified by the Government,
the selling prices of PDS Kerosene and Domestic LPG were to vary
in line with the international prices, after taking into account
the flat rate of subsidy provided from the Government budget.
However, the international prices of these products have remained
quite high and have shown excessive volatility after the dismantling
of APM. Considering that PDS Kerosene is largely consumed by the
economically vulnerable sections of the society and that the use
of LPG for domestic cooking has been encouraged as a clean environment
friendly fuel in the recent period by the oil marketing companies,
the oil marketing companies did not increase the selling prices
of these products after the dismantling of Administered Pricing
Mechanism. Right now over 7 crore families are using LPG as cooking
fuel in the country.
Shri Ram Naik further
said that the decision to increase the subsidy phasing out period
from three to five years would benefit the consumers.
