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Direct Govt Subsidy On Kerosene

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Government said on Tuesday it planned to provide direct subsidy to beneficiaries of kerosene oil and a pilot project in this regard in Alwar district of Rajasthan was yielding good results.

"Direct subsidy on kerosene is planned in future...We have to move towards it. It will be done using UID cards... We are benefiting from the pilot project," Minister of State for Petroleum and Natural Gas RPN Singh said in the Rajya Sabha.

He said the Government had provided subsidy of Rs 1,38,541 crore during 2011-12 and a subsidy burden of Rs 1,89,605 crore on petroleum products was due during the current year.

"The government is bearing a subsidy of Rs 503 per LPG cylinder, a subsidy of Rs 32 on per litre of kerosene, while the loss on diesel suffered by oil marketing companies was Rs 13.64 per litre," he said during Question Hour.

He suggested that subsidy should be reduced and urged members to take the lead in doing away with their LPG quotas.

"A proposal should come from all MPs that they will not take subsidy on their LPG cylinder. This would show the way so that the message goes that the subsidy is meant for the poor," he said, adding that the rich were also taking subsidy which was meant only for the poor and lower middle class.

The Minister said a pilot project providing direct subsidy to poor and lower middle class beneficiaries was successfully under implementation in a Tehsil in Alwar district of Rajasthan and the government was benefiting. He said details of the project were yet to be received as it was still on.

To another question, he said there is no plan before the government to supply PDS kerosene to fishermen of Kerala, but said non-PDS kerosene could be provided to Kerala government for fishermen if a demand was made.

Upstream Oil Cos To Bear 40% Of Fuel Subsidy
on Monday, the government had said upstream oil companies will have to bear nearly 40 per cent of the Rs 1.38 trillion cost of retail fuel subsidies for the 2011-12 year.

Oil and Natural Gas Corp (ONGC), Oil India Ltd and GAIL (India) sell refined products and crude oil to state fuel retailers at a discount. Government also provides a cash subsidy to cover some of their losses.

State-run upstream firms will give a total discount of about Rs 55,000 crore to Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp, the source said.

The subsidy payout and additional compensation from government would allow the fuel retailers to post profits for the January to March quarter, said the source, who was not authorised to speak to media.

The union government fixes the retail prices of cooking gas, kerosene and diesel to help the poor and keep inflation in check.