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Govt Has Been Quietly Reducing Cooking Gas Subsidy Over The Past Few Months

It's phasing out subsidies to bring in line with market prices

02/08/2016 11:09 AM IST | Updated 02/08/2016 11:50 AM IST
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LPG prices have been raised in small, unnoticeable amounts over the past couple of months, in a sign that the government is gradually phasing out LPG subsidy on cooking gas, noted a report by Siddhartha P Saikia in the Financial Express.

Prices of subsidised LPG refills have gone up by ₹2 for each refill for two straight months.

Effective August 1, the price of subsidised domestic cooking gas in Delhi was ₹423.09 per refill, up from ₹421.16 in July. In June, LPG cost ₹419.18 per refill. There were similar hikes in fuel prices across the country, FE reported. The prices on subsidised kerosene have been increased by 25 paise per litre each month.

Meanwhile, the average subsidy on domestic LPG has fallen by about 63 per cent to ₹11.08 a kilo in fiscal 2016 fro ₹29.63 per kilo in the previous fiscal. This appears to be a tactic that the previous UPA government followed in phasing out subsidy on diesel.

The Modi government is yet to officially announce the increases, but has claimed that its direct benefit transfer scheme, or Pahal, has led to over ₹21,261.4 crore in savings resulting from the cancellation of over 3.5 crore ghost connections, and the voluntary surrender of subsidy by over one crore people under the 'Give-it-up' campaign.

The direct transfer scheme has come under tight scrutiny with a recent Comptroller and Auditor General of India audit.

A CAG report questioned government's claims on the subsidy savings, noting the total savings from the scheme amount to less than ₹2,000 crores, a fraction of what the government has been claiming. The government maintains its stance on the savings saying the cancellation of ghost connections has led to those savings.

ALSO READ: LPG Subsidy Savings A Fraction Of What Modi Has Been Claiming: Report

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