Burdened with high subsidy, the Petroleum Ministry plans to provide non-subsidised lPG cylinders to households of foreigners residing in India, NRIs living in the country, and diplomats as well as overseas students - a move which is likely to cut down Government's losses which it incurs on selling subsidised bottles below market price.
Official sources confirmed to The Pioneer that necessary orders regarding this have been issued to oil marketing companies (OMCs) and subsequently such households are now being provided non-subsidised lPG cylinders with effect from January 1, 2014.
The ministry, they added, has directed OMCs to collate the data related to such households and accordingly stop supply of subsidised lPG cylinders to them with immediate effect (after it became applicable from January 1).
Industry sources confirmed the exercise to this newspaper but at the same time added that they don't have exact figures at hand of number of such households and therefore all dealers across the country have been issued directions to stop supply of subsidised lPG bottles to such families.
Apart from households of NRIs, foreign nationals residing in the country and overseas students in India, the Government is also targeting households of diplomats already residing in India and those who have just arrived in the country. Staffers of embassies and high commissions who are of foreign origin as well as persons of Indian origin living here are also under the radar of the directive, sources added.
The move, industry watchers said, would to some extent help in cutting the Government's subsidy burden on selling 'aam admi' fuels (lPG, diesel and kerosene) at lower costs. Shedding the subsidy load is something which it has not been able to achieve despite increasing the cost of diesel on a monthly basis by 50 paise a litre.
The thinking behind the move is that the Government had started supplying subsidised lPG to poor as well as middle class households with the aim of providing cheap cooking gas to all, however with the subsidy burden breaking the backs of OMCs, it was thought that why should affluent families and foreigners be given the perks of using cooking gas sold well below market price.
last week, the OMCs had hiked the price of non-subsidised lPG cylinders by a steep Rs 220 a bottle, as a result of which the 14.2-kg cooking gas cylinder that consumers buy beyond their entitled nine bottles at subsidised rates, now costs Rs 1,241, up from Rs 1,021 in Delhi.
A subsidised 14.2-kg cylinder of lPG costs Rs 414 in Delhi and with the Government having now decided to sell non-subsidised cylinders to foreigners and NRIs, it would help in infusion of much needed funds in the Centre's coffers and help it in cutting the subsidy burden. OMCs currently lose Rs 762.70 per cylinder on the sale of subsidised lPG.