No view on limited subsidised LPG

New Delhi: The government has taken no view on the proposal to limit supply of subsidised LPG cylinders to 4-6 per household in a year as it is politically sensitive decision, Oil Minister S Jaipal Reddy said on Wednesday.

"The Empowered Group of Ministers is yet to meet to take a view on the proposal to restrict the supply of subsidised LPG cylinders," he told the Economic Editors Conference here.

"It is political sensitive decision … until we persuade the people more, we cannot take unpleasant decisions," he said.

A meeting of the EGoM headed by Finance Minister Pranab Mukherjee was called on September 16 but had to be postponed as ruling party allies, Trinamool Congress and DMK, opposed the move. Ministers of the two party in the Prime Minister Manmohan Singh government are part of the EGoM.

Reddy said no new date for the EGoM meeting has been set. As per the proposal mooted by Reddy`s ministry, every household was to get only 4-6 LPG cylinders at subsidised price of Rs 395.35 in Delhi and they will have to pay market price of Rs 666 per cylinder for any requirement beyond that.The limited supply of subsidised LPG would be for those who own a car, two-wheeler, house or figure in the income-tax list.

Each 14.2-kg bottle of LPG normally lasts a household 45-60 days and based on this calculation a maximum of six cylinders are considered enough to see a family through the year. At present, records of LPG distributors of public sector companies shows that a vast number of households are taking as many as 20 to 30 cylinders per household each year.

This suggests that large scale diversion of subsidised cooking gas is taking place for use in commercial establishments, such as restaurants and dhabas and as auto fuel. LPG for commercial use is sold at the market price and packed in different cylinders.

Reddy said limiting supply of subsidised LPG cylinders would have helped cut down about Rs 25,000 crore of losses that state-owned oil firms incur now on selling the fuel at government controlled rates. Indian Oil, Bharat Petroleum and Hindustan Petroleum lose about Rs 67 crore per day on selling domestic LPG below cost.