Union minister for petroleum and natural gas Ram Naik said that even after the dismantling of the administered pricing mechanism (APM) from April 2002, the subsidies on liquefied petroleum gas (LPG) and kerosene will remain in place at 15 per cent and 33.33 per cent, respectively.
However, since the current subsidisation stands at much higher levels, decisions regarding the scaling down of the subsidy to bring it in line with the desired target levels will be taken in a phased manner.
Naik said the subsidies on LPG would not be extended to private LPG marketeers before the APM phase off.
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However, no decision has been taken as to whether it will be done after dismantling the APM, he said.
The minister was speaking at a function to commemorate the completion of drilling of the 125th well by the offshore rig "Sagar Samrat" at Mumbai Offshore.
Gas reserves at the well were estimated to be 7 billion cubic metre valued at about Rs 1,400 crore, which would be recovered over a period of time.
He also unveiled the ministry's plan to introduce a system for supplying to domestic users specially targetted at rural households.
As part of the spread to rural areas, 2,300 new agents are to be appointed all over the country.
Cylinder capacity would also be brought down to 5 kg thereby substantially reducing initial cost per cylinder as well making an LPG cylinder more manageable in a rural household budget.
About 1.27 lakh new connections were provided last year countrywide, and the waiting list has been liquidated, he said.