LPG rates likely to go up
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Irked by the delay in release of funds towards payment of Rs 25 subsidy on each LPG domestic cylinder by the state government, the oil marketing companies are planning to recover the amount from the consumers. If that happens, the consumers have to bear an additional Rs 25 on each cylinder, a blow to the middle and lower income groups already reeling under the Centre's recent decision to cap the number of subsidised cylinders at 6 per year from this financial year (2012-13).
The state government has been giving the subsidy on domestic cylinders since June 2008, when the Centre effected a steep hike by Rs 50 then. The YSR government had decided to absorb the entire hike of Rs 50 and ensured that consumers were not burdened by the hike. The subsidy was subsequently reduced to Rs 25 during the Rosaiah government in 2010. Despite the reduction, the subsidy has been imposing a burden of nearly Rs 200 crore on the exchequer every year.
However, the government has not been making regular payments to OMCs since then, and the arrears have been piling up. As of now, the government owes nearly Rs 150 cro-re in arrears to the OMCs, which has become a cause of concern for them. Even in this year’s Annu-al Budget (2012-13), the government has allocated just Rs 75 crore towards the subsidy, while the actual requirement is Rs 200 crore, an indication that the arrears may increase.
The OMCs have been insisting that the civil supplies department takes steps to clear the arrears at the earliest, or they would be forced to recover the same from the consumers. At present, though the OMCs issue bill for Rs 402 while delivering the cylinders at homes, the delivery boys collect Rs 410 citing ‘delivery charge’. If they insist on the Rs 25, consumers would be forced to pay 435 per cylinder.
However, minister for civil supplies D. Sridhar Babu said he had taken up the issue with finance minister Anam Ramna-rayana Reddy, who promised to release the funds at the earliest to OMCs.
Meanwhile, the government is considering extending the Rs 25 subsidy on cylinders only to BPL families from next financial year (2013-14) and not scrapping the subsidy scheme altogether, anticipating protests from weaker sections and the Opposition ahead of general elections in 2014.
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