News Release Details
Got PAN? You may shell out more for LPG
New Delhi 07-Sep-2007
PAN cardholders may be in for a shock if this proposal manages to pass political muster. The government is planning to withdraw LPG subsidies for PAN cardholders. Consumers may, therefore, have to fork out higher bills for cooking gas. The proposed subsidy waiver will hike cooking gas prices to over Rs 500 a cylinder. As per. the proposal, all consumers holding PAN cards will pay Rs 212 more per cylinder of LPG. It is proposed that LPG will now be sold through a smart "card bearing the consumer's PAN number. "PAN numbers will be made an essential part of the proposed LPG smart card so that in future, income-tax payers could pay the actual cost of LPG cylinders," an official said. The proposal has been raised at the meeting of a committee of secretaries (CoS) constituted for implementing the recommendations of the expert committee on integrated energy policy. The Cabinet secretary heads the CoS. However, changes in retail prices of fuel, particularly kerosene and LPG, have always been politically sensitive since they impact the vote bank. LPG prices were last raised in April 2005. "The proposed move is aimed at reducing the government's subsidy burden," an official said. Currently, the price of a gas cylinder is subsidized by both the government and public sector oil marketing companies (OMCs) in the ratio of Rs 22.50/cylinderandRs 190/cylinder. Consequently, consumers have a cushion of around Rs 212.50 per cylinder. The subsidy for cooking fuel is uniformly enjoyed by all consumers irrespective of their economic background. The government has been working on strategies to limit subsidies only to targeted consumers such as families below the poverty line. PSU oil companies like IOC, HPCL and BPCL are incurring major losses thanks to the heavy subsidy burden on sales of LPG and kerosene. In 2004-05, the total under-recoveries of OMCs on sale of domestic LPG were about Rs 17,842 crore, which jumped to Rs 28,584 crore in 2006-07. The petroleum ministry has informed the CoS that "a pilot project for introducing smart card for all LPG users is under implementation", a source said. According to the expert committee report, A system of debit cards or smart cards may be introduced whereby the targeted households get a credit of different amounts of cash for the purchase of these entitlements. The available credit on the debit/smart card can only be used for purchase of these entitlements. With modem ICT, card readers operated on battery and feeding data using mobile technology can work in rural areas too."
New Delhi 07-Sep-2007
PAN cardholders may be in for a shock if this proposal manages to pass political muster. The government is planning to withdraw LPG subsidies for PAN cardholders. Consumers may, therefore, have to fork out higher bills for cooking gas. The proposed subsidy waiver will hike cooking gas prices to over Rs 500 a cylinder. As per. the proposal, all consumers holding PAN cards will pay Rs 212 more per cylinder of LPG. It is proposed that LPG will now be sold through a smart "card bearing the consumer's PAN number. "PAN numbers will be made an essential part of the proposed LPG smart card so that in future, income-tax payers could pay the actual cost of LPG cylinders," an official said. The proposal has been raised at the meeting of a committee of secretaries (CoS) constituted for implementing the recommendations of the expert committee on integrated energy policy. The Cabinet secretary heads the CoS. However, changes in retail prices of fuel, particularly kerosene and LPG, have always been politically sensitive since they impact the vote bank. LPG prices were last raised in April 2005. "The proposed move is aimed at reducing the government's subsidy burden," an official said. Currently, the price of a gas cylinder is subsidized by both the government and public sector oil marketing companies (OMCs) in the ratio of Rs 22.50/cylinderandRs 190/cylinder. Consequently, consumers have a cushion of around Rs 212.50 per cylinder. The subsidy for cooking fuel is uniformly enjoyed by all consumers irrespective of their economic background. The government has been working on strategies to limit subsidies only to targeted consumers such as families below the poverty line. PSU oil companies like IOC, HPCL and BPCL are incurring major losses thanks to the heavy subsidy burden on sales of LPG and kerosene. In 2004-05, the total under-recoveries of OMCs on sale of domestic LPG were about Rs 17,842 crore, which jumped to Rs 28,584 crore in 2006-07. The petroleum ministry has informed the CoS that "a pilot project for introducing smart card for all LPG users is under implementation", a source said. According to the expert committee report, A system of debit cards or smart cards may be introduced whereby the targeted households get a credit of different amounts of cash for the purchase of these entitlements. The available credit on the debit/smart card can only be used for purchase of these entitlements. With modem ICT, card readers operated on battery and feeding data using mobile technology can work in rural areas too."