LPG cylinder prices to go up; government in a mood to reduce petroleum subsidy- report

The Ministry of Finance has reduced the petroleum subsidy by two-thirds to Rs 12,995 crore for FY 2021-22, despite an increase of nearly one crore in the number of Ujjwala yojna beneficiaries. A Mint report states that the government hopes that the gradual price increase for subsidized LPG cylinders will reduce its subsidy burden.

A finance ministry official, on the condition of anonymity, said, “This is part of the longterm cleanup in the subsidy. We are gradually increasing the prices of kerosene and LPG. It will continue till the next financial year. Every year We are also releasing arrears, so the arrears are decreasing. So the amount of petroleum subsidy to be released next year is less. This is the effect of cumulative reform. ”

In the report, this official also said that petroleum prices are rising internationally with the rise in the price of crude oil, but LPG prices are not related to this and are still on average.

The official added, “Last year, there was a significant change in the price of LPG, which reduced the subsidy. Also next year, we do not expect gas prices to rise as petrol prices rise. This is completely different. There is a market. Due to reduced transport capacity, the price changes also reduce. It is not as volatile as the price of crude. ”

Explain that LPG cylinder prices in India are revised once every month based on the international benchmark rate of LPG and foreign exchange rate of Indian rupee.