New Delhi: The government of India has completely eliminated subsidy on domestic LPG cylinders in the country. The reason is the fall in prices internationally. At present, the prices of subsidized and non-subsidized domestic LPG cylinders have become equal. That is, at least this month, the government will not need to transfer direct benefits to people’s accounts. With this, the government hopes to save big on gas subsidy. Non-subsidized gas prices have come down due to lower crude oil prices. The price of the 14.2-kg LPG cylinder without subsidy was Rs 594 after no change in prices on Tuesday. At the same time, the subsidized gas price has gone up from Rs 494.35 to Rs 594 with a steady increase in prices from July 2019.
The government has made a provision of Rs 40,915 crore for LPG cylinder subsidy in the current financial year, while in the first quarter only Rs 1900 crore was used. Obviously, if a similar situation of crude oil persists, then there can be big savings.
Under the current system, the government subsidizes 12 cylinders of 14.2 kg per family each year. The consumer buys LPG cylinders at market price and the government later transfers the rupee to the account. This advantage is not provided by the 13th cylinder. The amount of subsidy given by the government on the annual quota of 12 refills varies from month to month. Subsidies are largely determined by factors such as crude oil and foreign exchange rates.
