Government close to decision on capping number of subsidised LPG cylinders

19 Jul 2012

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The government is close to taking a decision on capping the number of subsidised cylinders to "econonomically not weaker" sections to bring down the subsidies by up to Rs 10,000 crore annually, according to minister of state for petroleum and natural gas, RPN Singh.

He said today, that the government was also considering partial decontrol of diesel.

According to Singh, the government gave Rs36,000 crore in subsidy on LPG and a lot of people who were "not economically weaker sections" who did not require it, were helping themselves to undue benefit. He added the government was considering reducing the subsidy on LPG by capping the the number of cylinders given on subsidy.

Adding that the government was in an advanced stage of taking a decision on cutting LPG subsidies, he told reporters on the sidelines of a function: "If we cap some cylinders, which do not infringe on the right of poor people who get subsidies, I think we can save Rs 8,000 crore to Rs 10,000 crore just by capping the cylinders for the rich".

He however, sounded cautious on the issue of hiking diesel prices saying it was a very delicate issue.

"If you try to raise the prices of diesel, it has a cascading effect on the economy. We are trying to work out a solution where it impacts the economy in the least manner but also brings down the fiscal deficit", Singh said.

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