Govt to raise cap on subsidised LPG cylinders to 9 a year

New Delhi: The government will increase the number of subsidised cooking gas (LPG) cylinders a household can avail in a year to nine from current six, Oil Minister M Veerappa Moily said on Tuesday.

Wary of political backlash of the decision to limit supply of subsidised LPG to just six cylinders per household annually, Moily has convinced Finance Minister P Chidambaram of the need to modify the September decision to cap the supply of subsidised cooking cylinders.

"I think it is likely to go up, definitely from six (cylinders) to nine (cylinders)," Moily told reporters here.

As per the September 13 decision, every household could avail of six LPG cylinders of 14.2-kg at subsidised rate of Rs 410.50 per bottle. Any requirement beyond will cost the market rate of of Rs 931 per cylinder.

Only 44 per cent of households in the country consume six cylinders in a year, while the majority consume 9-12 bottles.

Moily said the decision to raise the cap will be taken by the Cabinet "very shortly".

The original decision to cap supply at 6 cylinders was taken by the Cabinet Committee on Political Affairs on September 13 and the decision to raise it would also have to be taken by the Cabinet panel, he said.

"I think as early as possible," he added.

Moily said he has had two rounds of discussions with Finance Minister P Chidambaram on the impact of the decision to raise the cap.

The government will have to provide an additional Rs 9,000 crore annually if the cap is raised to nine cylinders.

"We are working on that," he said on ways to mitigate the additional subsidy requirement. "We are working on certain formula to neutralise it."

Asked if the government will wait for elections in Gujarat to get over before raising the cap, he said: "No."

"Even if we announce it now… it will not affect state elections as normally that state will be excluded (from implementation of the decision)," Moily said.