LPG, kerosene sops may stay

The government is expected to extend the subsidy scheme for cooking gas and kerosene by two years in the forthcoming Budget.

The subsidies, estimated at Rs 3,500 crore for the current financial year, were to be eliminated from the next financial year. However, sources said while formalising the oil package yesterday, the government had decided to extend the subsidy till 2007.

Last evening, Petroleum Minister Mani Shankar Aiyar had said, "Subsidies for LPG and kerosene will continue in 2004-05. But the original Cabinet decision was to phase out the subsidies in three to five years. So, in principle it is possible to have subsidies for another two years."

It is learnt that the government may also increase the Rs 22.58 per cylinder subsidy on cooking gas announced in the interim Budget for 2004-05 to about Rs 40 in the forthcoming Budget and that on kerosene to Rs 1.10 per litre from the Rs 0.81 per litre budgeted.

Petroleum ministry sources said despite the Rs 20 per cylinder hike, excise duty cut and government subsidy of Rs 22.50, the cooking gas selling price of Rs 261 in Delhi was short of cost by about Rs 80 per cylinder.