N. Ravi Kumar

Reduction in price of LPG cylinders among reasons

Scheme came into force on July 1 last year

State felt expenditure can be used to strengthen public distribution system

CHENNAI: The State government has withdrawn with effect from November 1 the Rs. 30 subsidy it had introduced in July last year for single-cylinder domestic LPG consumers.

Officials of the Civil Supplies Department on Saturday conveyed to the liquefied petroleum gas distributors of the national oil marketing companies the decision to discontinue the subsidy. .

The subsidy was not available to double-bottle consumers.

“We’ve been asked not to provide the subsidy… from November 1,” a distributor for Indian Oil Corporation said.

The scheme came into force on July 1 last year. Under the scheme the government also extends a subsidy of Rs.11 on the 5-kg cylinders that are supplied mainly in hilly areas.

To offset increase

The subsidy was introduced to partially offset the Rs.50 increase in cost effected for the 14.2 kg cylinder in the first week of June by the Centre in the wake of spiralling crude oil prices.

Informed sources in the State government said the decision to discontinue the subsidy was taken in view of various factors, including a reduction in the price of LPG cylinders that had been made subsequently.

When the Centre reduced the per cylinder price by Rs.25 each in the last week of January, the price dropped below the pre-June 4, 2008-level for single-cylinder consumers.

Not effective

Another reason cited by the sources was that the scheme was not effective as the oil companies were not directly involved in the disbursement of the subsidy. It was being implemented through the distributors and there were complaints from customers.


A senior official of the Food Department said the department had acted on the complaints and asked distributors to provide the subsidy. The distributors had also complained about delay in receipt of the subsidy component from State government agencies.

Against this backdrop, the State government felt that the expenditure on account of the subsidy could be utilised for strengthening the public distribution system, officials said.

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