Government favours end to subsidised cooking gas to rich: Minister

March 29th, 2011 - 4:34 pm ICT by IANS  

New Delhi, March 29 (IANS) The government is seriously thinking of “ending concessional pricing” of cooking gas to the better off to bring down the mounting bill on oil subsidy, Minister of State for Petroleum and Natural Gas R.P.N. Singh has said.

The minister, who also oversees the corporate affairs portfolio, said the government will have to take a call soon on hiking prices of petroleum fuels in the wake of fluctuating global oil prices and heavy burden on the exchequer.

“Prices of crude are fluctuating due to unforeseen circumstances. A call on prices has to be taken sooner than later,” Singh told IANS in an interview, adding that a balance had to drawn between subsidy and the need to protect the interests of the poor users.

“We are in a catch-22 situation,” he said, while calling for an out-of-box solution — one that would require an end to the subsidy regime for those who can afford to pay full price for cooking gas.

“It may be voluntarily or based on income tax criterion. We are discussing this.”

Singh, 46, a first-time Congress parliamentarian from Kushi Nagar in Uttar Pradesh, said fluctuations in crude prices have been caused by the unrest in some parts of the Arab world, as also due to the fallout of the earthquake and tsunami in Japan.

He said the government was watching the situation.

According to the minister, oil marketing companies were taking a huge hit due to hike in international crude prices, having to sell fuels at below coat, which is referred to as under recoveries. He did not say when a decision on price hike will be taken.

The government, he said, had advised oil-marketing companies not to raise prices after the last price hike in January this year, but clarified that the decision to deregulate petrol prices had not been suspended.

The government had decided to deregulate price of petrol in June last year.

The subsidy bill on petroleum products in the current fiscal could touch over Rs.100,000 crore, the minister warned, adding the subsidy amounted to Rs.10.74 per litre on diesel, Rs.21.60 a litre on kerosene and Rs.356.07 per cylinder on cooking gas.

According to estimates, the average price of the Indian basket of crude in the fourth quarter of this fiscal had topped $102 per barrel, which was $15 more than that of the third quarter. India imports nearly 80 percent of its crude oil needs.

(Prashant Sood can be contacted at

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