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Subsidy on domestic LPG, kerosene to continue: Govt

Minister of State for Finance Namo Narain Meena said the government is committed to make essential fuels, particularly cooking fuels, available to people at affordable prices.

twitter-logo PTI   New Delhi     Last Updated: March 1, 2011  | 16:52 IST

The Government on Tuesday said it will continue to provide subsidised cooking gas to domestic consumers and kerosene to poor people, despite steep rise in prices of crude oil in the international market.

Minister of State for Finance Namo Narain Meena said the Government is committed to make available essential fuels, particularly cooking fuels, to the common man at affordable prices.

"In view of importance of the household fuels, namely PDS, kerosene and domestic LPG (Liquefied Petroleum Gas), the Government has decided that the subsidies on these products will be continued", Meena said in a written reply in Rajya Sabha.

Under the wholesale price index (WPI), inflation in mineral oils increased to 16.7 per cent in January, from 7.9 per cent in the corresponding period last year.

"This is mainly because of rise in crude oil prices (Brent) in international market, which rose to $96 per barrel in January 2011, from $77 per barrel in January 2010, and $45 per barrel in January 2009", Meena said.

Weight of mineral oils in WPI was 19.7 per cent in January compared to 9 per cent in the same month last year.

The public distribution system, kerosene and domestic LPG scheme 2002, as well as freight subsidy (for far flung areas) scheme 2002 have been extended till March 2014.

In reply to another question, the minister said the Government monitors the price situation regularly as "price stability remains high on the agenda".

Food inflation dipped to 9.3 per cent in January 2011 after rising to a high of 20.2 per cent in February 2010. The headline inflation was 8.23 per cent in January.

While presenting the Union Budget on Monday, Finance Minister Pranab Mukherjee said the government will move towards direct transfer of cash subsidy in a phased manner.

A task force headed by UIDAI Chairman Nandan Nilekani is working out the modalities for the proposed system of direct transfer of subsidy for kerosene, LPG and fertilisers.

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