 "Kerosene price raised 25 paise; profit rub for OMCs")
Five years after the United Progressive Alliance (UPA) government increased the price of kerosene, the Union government has approved a marginal hike of 25 paise a litre on the rate of cooking fuel, sold through the public distribution system (PDS) network. The revenue loss on kerosene has increased to Rs 13.12 per litre this month in the Delhi market, from Rs 11.73 per litre in June.
Both kerosene and domestic liquefied petroleum gas (LPG) prices are controlled by the Union government, though there is no subsidy on LPG, if a household consumes more than 12 cylinders in a year. The increase in rate of kerosene comes even as the government has been unable to introduce direct benefit transfer on it, three months after its original schedule of April 1.
Also Read: Kerosene Direct Cash Transfer Launch Hits A Stumbling Block
The UPA government had increased the price of kerosene for two consecutive years, which led to an increase of Rs 2.51 in 2011 and Rs 2.23 in 2010. A negligible 13-paise increase in 2012 was due to a hike in dealer commission.
Also Read: Targeting, Not Saving, Is The Aim Of Direct Benefits Transfer For Kerosene: Dharmendra Pradhan
Both kerosene and domestic liquefied petroleum gas (LPG) prices are controlled by the Union government, though there is no subsidy on LPG, if a household consumes more than 12 cylinders in a year. The increase in rate of kerosene comes even as the government has been unable to introduce direct benefit transfer on it, three months after its original schedule of April 1.
Also Read: Kerosene Direct Cash Transfer Launch Hits A Stumbling Block
The UPA government had increased the price of kerosene for two consecutive years, which led to an increase of Rs 2.51 in 2011 and Rs 2.23 in 2010. A negligible 13-paise increase in 2012 was due to a hike in dealer commission.
Also Read: Targeting, Not Saving, Is The Aim Of Direct Benefits Transfer For Kerosene: Dharmendra Pradhan
Officials said the Union ministry of petroleum and natural gas has approved the price hike. The oil marketing companies (OMCs) have been advised to increase the price at depots. Since subsidised kerosene is sold through the PDS, the state governments will need to notify the new price at which dealers sell at the retail level. “Some states have already done it, while others are in the process of doing so,” said an official in the Indian Oil Corporation (IOC).
The increase is estimated to bring in around Rs 6,000 crore to the three government-controlled OMCs — IOC, Bharat Petroleum and Hindustan Petroleum. Besides, crude oil and gas producing companies – Oil & Natural Gas Corporation and Oil India – that share the subsidy burden of OMCs, too, would benefit.
The revenue loss, known as underrecovery in industry parlance, on kerosene is at a decade-low, both on account of lower global benchmark price of Arab Gulf and a government policy of reducing kerosene quota of states, based on the penetration of LPG, an alternate cooking fuel. The loss stood at Rs 11,496 crore last year, from Rs 30,574 crore in 2013-14.
The revenue loss, known as underrecovery in industry parlance, on kerosene is at a decade-low, both on account of lower global benchmark price of Arab Gulf and a government policy of reducing kerosene quota of states, based on the penetration of LPG, an alternate cooking fuel. The loss stood at Rs 11,496 crore last year, from Rs 30,574 crore in 2013-14.
