A day after a Rs 3 a litre rise in the price of petrol, the UPA government was forced by its allies to postpone on Friday’s scheduled meeting to discuss capping the sale of subsidised cooking gas (LPG) cylinders. An empowered group of ministers (EGoM) headed by Finance Minister Pranab Mukherjee was to have met on the issue.
Official sources said the meeting was called off “due to non-availability” of certain members of the panel and no new dates have been notified. The petroleum ministry has suggested a phased capping of subsidised LPG cylinders, while putting in a mechanism for direct transfer of subsidy to the intended beneficiaries. Under this, consumers will have to buy cylinders above the proposed annual quota of four to six at the market price.
However, the move was opposed by key UPA allies, the Dravida Munnetra Kazhagam (DMK) and the Trinamool Congress (TMC). It is learnt DMK leader and Fertiliser Minister M K Alagiri had decided not to attend the meeting to show his party’s opposition.
The TMC was also opposed and its representative in the EGoM, Railway Minister Dinesh Trivedi, was to attend the meeting to voice his party’s strong opposition.
Others in the EGoM were National Congress Party head and Agriculture Minister Sharad Pawar, Power Minister Sushilkumar Shinde, Road Transport Minister C P Joshi, Petroleum Minister S Jaipal Reddy and Planning Commission Deputy Chairman Montek Singh Ahluwalia.
A domestic LPG cylinder is given at Rs 399.35 in Delhi, a discount of Rs 267 on the desired price, calculated on import parity. The total subsidy on LPG sale for the current year is estimated at Rs 27,000 crore.
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The subsidised price of domestic LPG gives an incentive for commercial usage diversion. It also leads to indiscriminate use of the cooking fuel.
“The idea is to have an income-based cap, so that the unrestricted subsidy is available only to financially weaker sections,” said a petroleum ministry official. If the proposal is accepted, consumers above a certain income level will have to pay Rs 666 for buying a cylinder over the capped quota.
The petroleum ministry had made proposals for capping the subsidy to the committee on direct transfer of subsidies headed by Unique Identification Authority Chairman Nandan Nilekani. The panel gave a report to the government in July.