LPG prices may go up by `5 every month

After diesel, the government is considering raising cooking gas (LPG) and kerosene rates in small doses of Rs. 5 per cylinder and Rs. 0.50-1 a litre every  month to wipe out Rs. 80,000 crore subsidy on the two fuels. The previous UPA government had in January 2013 decided to raise diesel prices by up to 50 paise litre every month. But for aberrations on two occasions, the monthly increases have taken place regularly to trim subsidy on diesel to just Rs. 1.62 a litre. This too looks set to be wiped off to make the fuel deregulated or free, with the new government continuing with the UPA decision. Following the diesel model, the oil ministry is now proposing monthly increases in LPG and kerosene rates, sources privy to the development said. Subsidy on LPG currently is a staggering Rs. 432.71 per 14.2-kg cylinder and at Rs. 5 per month increase it will take 7 years to wipe out the subsidy. Sources said the ministry is of the view that the monthly increases can be as high as Rs. 10 if the political leadership takes a stand. agencies