Millennium Post

Govt feels 1 crore well-off consumers will shun LPG subsidy

Government expects that about one crore well off consumers will surrender the subsidy on cooking gas after Prime Minister Narendra Modi’s appeal to people not to take subsidy if they can afford to buy LPG at market price.

“The target is one crore. Let us see how many more people decide to surrender LPG subsidy,” a top government functionary said. There are about 15.3 crore LPG consumers in the country. Modi in his address to a global energy conference last week said that as many as 2.8 lakh people have surrendered LPG subsidy which has led to savings of Rs 100 crore.

“As many as 2.8 lakh people have responded positively...and this will lead to a saving of at least Rs 100 crore. This Rs 100 crore can be utilised for the welfare of poor,” Modi had said. Since the government started the new scheme of direct benefit transfer (DBT) for cooking gas, several persons opted out of the subsidy scheme. Under the DBT, the subsidy amount is directly credited into the bank accounts of consumers even as they pay full amount for LPG cylinder at the time of purchase. 

Consumers are currently entitled to 12 14.2-kg cylinders or 34 five-kg bottles in a year at subsidised rates. Oil Minister Dharmendra Pradhan has already urged ministers, MPs, MLAs, senior government officials and executives of public sector companies to give up their subsidies.

Public sector oil marketing companies (OMCs) have given an option to existing LPG consumers to convert their existing domestic LPG connection into a non-subsidised domestic connection. This can be done by submitting a written request to the distributor or electronically via 

Giving up subsidised LPG will help cut the government’s subsidy bill. In 2015-16 Budget estimates, petroleum subsidy has been halved to Rs 30,000 crore, from estimated Rs 60,270 crore in the current fiscal. Of Rs 30,000 crore for next fiscal, Rs 22,000 crore has been earmarked for LPG subsidy and the rest is for kerosene.
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