Congress CMs demand increase in LPG cap

With the general elections round the corner, a few Congress-ruled states have demanded that the annual LPG cylinder cap be raised from nine to 12.

In case it happens, the government’s subsidy burden would increase by a few thousand crore rupees at a time when the Finance Ministry is trying hard to cut plan and non-plan expenditures to meet the 4.8 per cent fiscal deficit target.

“One or two chief ministers have mentioned that in urban India there is an expectation that the number of subsidised cylinders should be increased to 12 a year,” Finance Minister P Chidambaram told a TV channel on Monday. “I can’t say about the future.”

Sources in the Petroleum Ministry could not confirm whether any such move was in the offing, but said there had been a similar demand.

In December last year, the Petroleum Ministry decided to raise the cap from six to nine cylinders following pressure from states. There were several rounds of negotiations with the Finance Ministry as the additional subsidy outgo for three extra cylinders was estimated to be over Rs 9,000 crore per annum.

If the limit was raised to 12 cylinders, it would be in gross violation of a government-appointed committee’s prescription. A couple of months ago, it had suggested some politically unpalatable fuel pricing reforms and suggested that the number of subsidised cylinders supplied to households should be reduced to six.

The opposition BJP has promised that if voted to power, they would increase the number of subsidised cooking gas cylinders per household to 12.

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