With the government deciding to roll back the price of a liquefied petroleum gas cylinder by Rs 20, the subsidy bill on kerosene sold through the public distribution system and domestic LPG during 2002-03 is expected to go up to Rs 5,195 crore, in case the international price of crude rules around $20 a barrel.
However, if the international price of crude remains at the current level of $23 a barrel, the annual subsidy burden on the two petroleum products could climb to Rs 8,200 crore. Of this, only Rs 3,200 crore would be taken care of by excise duties on these products, petroleum ministry sources said.
To meet this burden, the government would either have to increase the prices of the two products, or it would have to enhance the subsidy provisions under the supplementary demands for grants, sources said.
While the 2002-03 budget had made a provision of Rs 4,495 crore for the kerosene and LPG subsidy, the rollback, announced by petroleum minister Ram Naik in Parliament yesterday, is expected to push up the subsidy bill by Rs 700 crore.
After taking local taxes into account, the cooking gas cylinder will now be cheaper by Rs 19.50 in Delhi (Rs 240.45 a cylinder), and by Rs 19.55 in Mumbai (Rs 244.20 per cylinder). The new price in Kolkata will be Rs 265.50 as against the old price of Rs 286.65. In Chennai, an LPG cylinder will cost Rs 19.50 less at Rs 247.40.
The petroleum minister, who met Prime Minister A B Vajpayee on Friday to discuss the issue, had initially proposed a cut of Rs 15, but raised it to Rs 20 minutes before he made the announcement in Parliament.
