The white paper on subsidies has highlighted that the total subsidy on petroleum during 1996-97 came to Rs 18,440 crore, 100 per cent more than the figure during the preceding year.
The paper says that in 1996-97, the subsidy on kerosene (domestic) came to Rs 6,350 crore, liquefied petroleum gas (domestic) Rs 1,950 crore, diesel Rs 8,340 crore, naphtha Rs 980 crore, fuel oil (for fertilisers) Rs 390 crore, LSHS (for fertilisers) Rs 200 crore, bitumen packed Rs 190 crore and wax Rs 40 crore.
The paper points out that in terms of the magnitude and the rate, the increase in subsidy on diesel was phenomenal. It increased from Rs 430 crore in 1994-95 to Rs 8,340 crore in 1996-97. In terms of subsidy rates, the increase during this two-year period was Rs 0.13 to Rs 1.97 per litre.
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Diesel consumption also increased by about 42 per cent between 1991-92 and 1995-96, in part due to the low relative price. The proportion of diesel subsidy in the total petroleum subsidy increased from 6.55 per cent to 45.22 per cent between 1994-95 and 1996-97.
The white paper says kerosene is the other petroleum product that is heavily subsidised.
More than half of its domestic requirements are met by imports (56 per cent in 1995-96). The subsidy on kerosene rose from Rs 3,740 crore in 1994-95 to Rs 6,350 crore in 1996-97.