New Delhi: The government has completely eliminated the need to provide subsidy on domestic cooking gas as the global fall in oil prices and frequent rise in LPG gas cylinder price has brought the price of the common man’s fuel closer to market rates.
As of September 1, the price of non-subsidised and subsidised 14.2 kg cooking gas is identical at Rs 594 a cylinder. What this means is that government would no longer need to pay subsidy under the direct benefit transfer scheme (DBT) into the account of beneficiaries.
In fact, with the price gap between the subsidised and non-subsidised cooking gas narrowing since early this fiscal, the government has not made a any cash transfers into the accounts of beneficiaries for the last four months.
With the development, the government could easily make a saving of over Rs 20,000 crore in FY21 towards LPG subsidy. This would be huge given the pressure on the government to step up expenditure for Covid-19 relief schemes.
The government has allocated Rs 40,915 crore as petroleum subsidy for FY21, a 6 per cent increase from Rs 38,569 crore allocated for the last fiscal. Out of this,the allocation for LPG subsidy has been increased to Rs 37,256.21 crore for the current year. But so far in the first quarter period, the government had to draw just about Rs 1,900 crore from the subsidy provisions.
