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Steep hike in Diesel Price, Cut in Subsidised LPG


Prime Minister Dr Manmohan Singh

Raipur, September 13, 2012: In a severe blow to the common men, Congress led UPA government today increased the price of diesel by Rs 5 and drastically cut the subsidy on the subsidised domestic LPG cylinders to a meager six a year.

Further, branded Diesel would be sold at the market rate, the Government said.

The Cabinet Committee on Political Affairs met today under the chairmanship of Prime Minister Manmohan Singh to review the international crude oil price and decided to increase the price of Diesel by Rs. 5 per litre excluding VAT.

"Out of this, Rs 1.50 per litre is on account of increase in Excise Duty. The balance increase of Rs 3.50 per litre will reduce the under-recovery of OMCs by about Rs. 15,000 crore for the remaining part of the current financial year," an official release said here today.

The under-recovery on sale of Diesel during 2012-13, even after this price hike, is estimated to be above Rs 1,03,000 crore, the government claimed.

The revised RSP of Diesel in Delhi would be approximately Rs 47 per litre.

The Congress led government also restricted the supply of subsidized LPG cylinders to each domestic consumer to six cylinders (of 14.2 Kg) per annum.

The under-recovery on sale of Domestic LPG during 2012-13, even after this measure, was estimated to be above Rs 32,000 crore, it said.

Any number of cylinders would be available over and above the cap of six cylinders at market rate, the government clarified.

The number of subsidized LPG cylinders available to each consumer in the remaining part of the current financial year would be three cylinders.

The state government also stated that the Department Related Parliamentary Standing Committee on Petroleum & Natural Gas, which has members from all Political Parties, had made recommendation on capping of subsidized LPG cylinders to 6 per annum.

While subsidized cylinders would continue to be available at Rs 399 per cylinder (at Delhi), the market rate of LPG cylinders at non subsidized rates would be notified by the OMCs on monthly basis, the Government added.

However, the government had not increased the price of PDS Kerosene, which was currently Rs 14.83 per litre (at Delhi).

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