LPG distributors threaten stir against subsidy cap

The National Federation of LPG Distributors of India has announced a nationwide strike on 1 October to oppose the cap on subsidised cooking gas cylinders that a household can obtain in a year, a measure introduced recently by the government to deal with its huge subsidy bill.

The federation's general secretary Pawan Soni said on Sunday that the move would create a huge black market and lead to unfair trade practices.

"With the government's latest decision on LPG (liquefied petroleum gas) cylinders, both the consumers and the distributors will suffer. Without consulting us, wrong policies are being adopted that will create a black market and promote unfair trade practices," said Soni.

The government had earlier capped the number of subsidised cylinders at six a year, but subsequently raised it to nine. The move is being strongly opposed by non-Congress ruled states and the entire opposition in general.

Soni said the distributors wanted the government to streamline the distribution network before taking a decision on capping subsidised cylinders. Distributors pointed out that the problem was with the existing infrastructure they have to cope with, not the decision in itself.

"It is a policy decision of the government with which we have no fight. We have no issues with the government charging market price for all cylinders. Giving of subsidy is a government prerogative," clarified Soni.

Among the things the distributors want is revision of the commission of Rs25.83 a cylinder that oil marketing companies give them. This was earlier revised in 2010. "We have about 200,000 delivery men in the country who get just Rs8 a cylinder," said Soni.

The Cabinet Committee on Economic Affairs had on 13 September decided that consumers of domestic LPG would get a subsidy for only six refills a year. Subsidised cylinders are currently priced at Rs399 in Delhi, while the non-subsidised cylinders will cost around Rs750.