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Rediff.com  » Business » Subsidised LPG cylinder quota to be hiked to 12

Subsidised LPG cylinder quota to be hiked to 12

Last updated on: January 17, 2014 18:35 IST

With Congress party vice president Rahul Gandhi making a strong pitch for raising LPG cap, Oil Minister M Veerappa Moily on Friday said the quota of subsidised cooking cylinders will be hiked to 12 from 9 per household.

"Yes, the cap will be increased," Moily said soon after Gandhi made a demand to Prime Minister Manmohan Singh at the AICC session.

Moily, who till last week had maintained that there was no proposal for raising the quota of subsidised LPG cylinders a household is entitled to in a year, said the decision will be announced after the Cabinet approves of it.

"The Cabinet will take a view (on it) soon," he said. Oil Ministry officials said they will move a proposal for the consideration of the Cabinet Committee on Economic Affairs or Cabinet Committee on Political Affairs once Moily instructs them to do so.

Gandhi at the AICC session stated that 9 cylinders were not enough for households and there was a need to increase this quota to 12 cylinders of 14.2-kg.

Moily had earlier this week stated that 89.2 per cent of the 15 crore LPG consumers use up to nine cylinders in a year and only 10 per cent have to buy the additional requirement at the market price.

If the quota is raised to 12, about 97 per cent of the LPG consumers would be covered by subsidised LPG, he had said. Increasing the limit to 12 would result in an additional fuel subsidy burden of Rs 3,300 crore-5,800 crore for the government, officials said.

With a view to cutting its subsidy bill, the government had initially capped the supply of subsidised domestic LPG cylinders to six per household in a year in September 2012.

The annual quota was raised to nine in January 2013. Consumers who have exhausted their quota have to buy LPG at the market price of Rs 1,258 per cylinder. Subsidised LPG costs Rs 414 per 14.2-kg cylinder in Delhi. 

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