The additional subsidy amount will be “over and above” the budget earmarked for the Centre’s landmark Ujjwala scheme, sources told CNBC TV-18.
The central government is considering an additional subsidy of up to Rs 30,000 crore to keep the retail price of liquefied petroleum gas (LPG) in check, CNBC TV-18 reported on September 12, citing sources.
The additional subsidy amount will be “over and above” the budget earmarked for the Centre’s landmark Ujjwala scheme, the report said.
The amount estimated for the additional subsidy is around “Rs 25,000-Rs 30,000 crore”, the news channel learnt from the persons who are privy to the development. They added that the subsidy amount will be paid to the oil marketing companies (OMCs).
The estimated amount, as stated in the report, is higher than Rs 5,812 crore marked as LPG subsidy in the budget estimate for the financial year 2022-23.
The report comes days after the state-owned fuel retailers slashed the price of a 19.2-kg commercial LPG cylinder by Rs 91.50, lowering it to Rs 1,885 from Rs 1,976 in New Delhi.
The cost of a 14.2-kg domestic cylinder has faced constant upward revision and was cumulatively increased by Rs 244 over the past one year. The last hike was announced in July when the prices were raised by Rs 50 per cylinder.
Non-subsidised LPG, the rate at which all households except the beneficiaries of the Ujjwala scheme buy the 14.2-kg cylinders, currently stands at Rs 1,053 in the national capital. For Ujjwala beneficiaries, the cost is Rs 853.
The surge in rates is being driven by international factors, primarily the volatility in oil and gas prices. The recovery from the COVID-19 pandemic, followed by the outbreak of the Russia-Ukraine war, led to a sharp spurt in prices in the global market.
While the LPG prices in Delhi have climbed by a total of 28 percent in the last two years, the rate of Saudi CP – the international price benchmark for gas – has increased by 300 percent during the same period, the CNBC TV-18 report pointed out.