· Petroleum Ministry presses for fuel price hike to wipe out subsidy Pressing ahead with the Khelkar Committee recommendations and grappling with massive under-recoveries, the Petroleum and Natural Gas Ministry has initiated a Cabinet note to raise the cap on subsidized LPG supply from six to nine cylinders a household a year, and increase diesel, LPG and kerosene prices in phases.
· As the Finance Ministry refused to share the subsidy burden of the oil marketing companies, the Petroleum Ministry is pressing for a phased price increase to cut the subsidy down to the bare minimum during the next two-four years.
· Based on the Khelkar Committee’s recommendations, the Ministry has proposed that the oil companies be allowed to increase LPG price immediately by Rs. 50-Rs. 100 and raise the rate every quarter till the subsidy is wiped out.
· Of the estimated fuel subsidy of Rs.1,66,000 crore during 2012-13, the Finance Ministry sanctioned Rs. 30,000 crore and released the first installment of Rs. 10,000 crore to the oil marketing companies last week.
· The government favors increasing the cap on LPG supply to nine cylinders. At the same time, it wants to raise the price to compensate for a subsidy of Rs. 8,000 crore the rise in the cap would entail on it.
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