Subsidised LPG cylinder quota to be raised after Rahul Gandhi approaches PM for sop

Written by Reuters | New Delhi | Updated: Jan 18 2014, 01:16am hrs
Rahul GandhiRahul Gandhi, in his speech, said women of this country could not make do with 9 LPG cylinders. (Reuters)
With Congress leader Rahul Gandhi on Friday demanding a hike in cap on subsidised cooking gas cylinders (LPG), PM Manmohan Singh-led UPA govt has indicated its willingness to do so.

Rahul Gandhi is continuing a populist streak as he leads the ruling Congress party into a tough national election due by May.

The Congress party vice president had asked Prime Minister Manmohan Singh to increase the cap on annual sales of subsidised cooking gas cylinders to 12 from 9 per household.

"There is another thing which the entire country, especially women are concerned, that is nine (gas) cylinders aren't enough, we need 12 cylinders," he said.

The demand will further strain federal finances which are under pressure in the face of weak tax receipts in a slowdown-hit economy and rising public expenditure.

The intention to raise the quota was announced by Oil Minister M Veerappa Moily: "Yes, the cap will be increased". He added the decision will be announced after the Cabinet approves it.

"The Cabinet will take a view (on it) soon," he added.

However, this is a climbdown for Moily who, till last week had maintained that there was no proposal for raising the quota of subsidised LPG cylinders a household is entitled to in a year.

Oil Ministry officials said they will move a proposal for the consideration of the Cabinet Committee on Economic Affairs or Cabinet Committee on Political Affairs once Moily instructs them to do so.

Moily had earlier this week stated that 89.2 per cent of the 15 crore LPG consumers use up to nine cylinders in a year and only 10 per cent have to buy the additional requirement at the market price.

If the quota is raised to 12, about 97 per cent of the LPG consumers would be covered by subsidised LPG, he had said.

Increasing the limit to 12 would result in an additional fuel subsidy burden of Rs 3,300 crore-5,800 crore for the government, officials said.

With a view to cutting its subsidy bill, the government had initially capped the supply of subsidised domestic LPG cylinders to six per household in a year in September 2012.

The annual quota was raised to nine in January 2013.

Consumers who have exhausted their quota have to buy LPG at the market price of Rs 1,258 per cylinder. Subsidised LPG costs Rs 414 per 14.2-kg cylinder in Delhi.