Cabinet to take final call on raising LPG cylinder cap: Moily

Oil Minister M Veerappa Moily on Sunday said the government is considering increasing the quota of subsidised LPG cylinders to 12 per household even as hints were dropped of a one-time hike in diesel and LPG rates. File photo

Union Petroleum and Natural Gas Minister Veerappa Moily on Sunday said the Union Cabinet would take the final call on increasing the number of subsidised LPG cylinders from the present nine to 12 per household.

Addressing a press conference at Petrotech 2014 here, Mr. Moily, who had last week ruled out any review of the decision, said though he had received some representations on the issue a final decision to hike the quota of LPG cylinders would be taken by the Cabinet after considering all the pros and cons.

However, Petroleum Secretary Vivek Rae indicated that at present there was no such proposal before the ministry. The occasion also marked the government unveiling the profile of 46 oil and gas blocks that it is proposing to put on offer through auction in the 10th round of New Exploration Licensing Policy (NELP) expected to be launched next month.

Mr. Moily also hinted at one-time hike in the price of diesel and subsidised LPG cylinders to counter the burgeoning subsidy burden on the state-run oil marketing companies (OMCs).``I have read in newspapers about Congress Vice President Rahul Gandhi taking up the issue of increasing the LPG cylinder cap with the Prime Minister. I am yet to receive any communication from him or the Prime Minister,’’ he said.

Mr. 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.

``If the quota is raised to 12, about 97 per cent of the LPG consumers would be covered by subsidised LPG. Increasing the limit to 12 would result in an additional fuel subsidy burden of Rs. 3,300 crore-5,800 crore for the government. If the proposal for raising LPG cap comes, we need to examine pros and cons,'' he added.

Mr. Rae said the ministry moving a Cabinet note to ensure a minimum $65 per barrel was paid to oil and gas producers like state-run Oil and Natural Gas Corporation (ONGC) from current $40-45.

Consumers who have exhausted their quota of domestic gas cylinders have to purchase each cylinder at the market price of Rs. 1,258. Officials said state-owned oil firms lose Rs. 762.70 per cylinder on the sale of subsidised LPG and the government will have to shell out higher subsidy if the quota is raised.