LPG Customers Alert: Centre Plans New Scheme for Cooking Gas Cylinders

People will now be concerned about more than just rising fuel prices as a big development concerning LPG cylinder subsidies is around the corner. According to a report, the Central Govt. may be contemplating changes to the scheme relating to the subsidy on LPG cylinders.

Also, according to the report, an internal government evaluation revealed that consumers of LPG cylinders are prepared to spend Rs.1000 each cylinder. This might be a hint that the government is preparing another hike in gas cylinder prices.

According to sources quoted in a report, the Indian government is presently considering two proposals. The first option is to sell cylinders without any consumer subsidies. The alternative option, on the other hand, allows for subsidies, but only for a set of customers.

While nothing has been officially confirmed by the government, reports suggest that the government may impose a subsidy ceiling. Families with a family income of Rs.10 lakh or more, for example, will be unable to apply for subsidies. This will assist in providing subsidies to those in need.

Since May 2020, the Central Government has been discontinuing LPG subsidies for several months. The step was taken after the price of crude oil and gas in international markets dropped during the COVID-19 pandemic.

However, government subsidies have not been entirely phased out. For example, the government's subsidy expenditure in fiscal year 2021 was Rs.3559. In comparison, the fiscal year 2020 expenditure was Rs.24468 crore.

Meanwhile, on September 1, the prices of Liquefied Petroleum Gas (LPG) cooking gas cylinders across all categories, including subsidised gas, were raised by Rs.25 per cylinder, marking the third consecutive increase in rates in less than two months. According to an oil company pricing notice, subsidised and non-subsidised LPG currently costs Rs.884.50 per 14.2-kg cylinder in Delhi.

While the price of a 14.2 kg LPG cylinder in Mumbai is now fixed at Rs.884.50 and Rs.900.50 in Chennai.

This is the third straight price hike in less than two months. On July 1, both subsidised and non-subsidised LPG prices were raised by Rs.25.50 per cylinder. Non-subsidised LPG prices increased by Rs.25 per cylinder on August 1 and again on August 18.

The policy is for the distribution of 12 cylinders of 14.2-kg for each household at subsidised or below-market pricing. Any amount in excess of this has to be bought at market or non-subsidized pricing. Domestic cooking gas prices have more than doubled in the last seven years.