Govt takes back monthly hike on LPG cylinders

Govt takes back monthly hike on LPG cylinders

The Centre has rolled back the Rs 4 a month hike on domestic cooking gas cylinders  and called it a "corrective measure".

The rollback came in October ahead of the crucial Gujarat and Himachal Pradesh Assembly elections but officially announced on Thursday.

A senior official said that the government has taken the "corrective measure" as it was felt that raising LPG price every month contradicted its promise of free cooking gas connection for the poor.

"It is felt that raising prices are giving a contrary signal to users. On the one hand, the government is pushing for free cooking gas connections for the poor; on the other, it is raising prices every month," the official said.The action, however, came only after the LPG prices had already been hiked by over Rs 76 a cylinder over the past 17 months. Now, it means that the hike will be kept in abeyance as the next round of polls in Karnataka and four other states are due early next year.

In July 2016, the petroleum ministry had authorised the oil marketing companies to increase the price of subsidised domestic LPG cylinders by Rs 2 per 14.2-kg cylinder every month, excluding VAT.Subsequently, in May this year, the ministry asked the companies, through an order, to double the hike to Rs 4 a cylinder till March 2018 to wipe out the subsidy on LPG gas refills. The oil companies hiked LPG rates at least on 14 occasions from July 16 to September 2017.

The government also asked the oil companies to continue the hike till March 2018 so that the LPG subsidy is eliminated. However, six months prior to the scheduled withdrawal, the oil firms abruptly stopped the monthly hike in October.

The official on Thursday said that the government withdrew its May 30 order for Rs 4 monthly hike in October.

Ihe order to hike LPG prices had taken everyone by surprise when on July 31 Petroleum Minister Dharmendra Pradhan, in a written reply in the Lok Sabha, informed that the price hike had been doubled. By that time the oil companies had already charged the consumers for two months.Each household is entitled to 12 cylinders of 14.2-kg each at subsidised rates each year. Beyond that one can purchase gas at market price.

Tax, global fluctuation

A 14.2-kg LPG cylinder which cost a consumer Rs 419.18 in June 2016, was priced at Rs 496 in November this year.

Despite the govt's move to withdraw the monthly Rs 4 hike, there has been an increase in LPG prices in October and November on account of rise in taxes and fluctuation in the LPG rates globally, the official explained.

 

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