Govt hikes subsidised LPG cylinder quota to 12 per year

Bowing to party pressure, the government on Thursday raised the quota of subsidised LPG to 12 cylinders per household in a year from nine at present and also put on hold paying users the subsidy into bank accounts using Aadhaar platform.

Announcing the decision taken by the Cabinet Committee on Political Affairs, Oil Minister M Veerappa Moily said raising the LPG quota will cost Rs 5,000 crore in additional subsidy annually.

Households will get one cylinder extra, on top of the quota of 9 cylinders, in February and March and from April they will be entitled for 12 cylinders -- one cylinder per month at subsidised rates, he said.

Moily also said the direct benefit transfer for LPG (DBTL) scheme, where consumers in as many as get 289 districts in 18 states got the subsidy amount in their bank accounts so that they could buy cooking gas at market rate, has been put on hold.

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Explaining the reasons behind the move to put on hold a scheme that was dubbed 'game-changer, he said there were complaints about implementation of the scheme and a committee has been formed to look into them.

"Pending the committee examining the issues, the Aadhaar-linked LPG subsidy transfer has been put on hold," he said.

DBTL, under which consumers got Rs 435 advance money in their bank accounts so as to help them buy a LPG cylinder at market price, was this month extended to 105 districts including Delhi and Mumbai.

Currently, a subsidised LPG cylinder costs Rs 414 while the market price comes to Rs 1,021. 

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Congress vice president Rahul Gandhi had at the All India Congress Committee session earlier this month asked Prime Minister Manmohan Singh to increase the quota of subsidized LPG to 12 cylinders of 14.2-kg each.

There had also been demands from within the Congress to scrap the DBTL as many consumers did not either have the Aadhaar number or banks accounts linked to the Aadhaar number.

Moily said 89.2 per cent of the 15 crore LPG consumers use up to nine cylinders in a year and only 10 per cent have to buy the additional requirement at the market price.

After the quota is raised to 12, about 97 per cent of the LPG consumers would be covered by subsidised LPG, he said.

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The government had initially capped the supply of subsidised domestic LPG cylinders to six per household annually in September 2012 in a bid to cut its subsidy bill.

The quota was raised to nine in January 2013.

Consumers, who have exhausted their quota, have to buy LPG at the market price of Rs 1,258 per cylinder. Subsidised LPG costs Rs 414 per cylinder in Delhi.