Saturday, November 3, 2012

Subsidized LPG cylinder cap may be raised to nine 

Sanjay Dutta TNN 

New Delhi: The annual cap on the number of subsidized cooking gas cylinders per household is likely to be raised from six to nine if not completely scrapped after the poll code is lifted after Himachal Pradesh and Gujarat elections,sources in state-run fuel retailing companies said.
Widespread consumer complaints over the ongoing customer verification drive KYC or know-your-customer as well as pressure from within the Congress and opposition parties appear to have prompted a relook.Though nothing has been put on paper yet,oil minister M Veerappa Moily himself gave an indication that the government was not fixated on the cap and was sensitive to aam aadmis travails. hey (state-run fuel retailers ) have gone by some arithmetic that on an average six cylinders are enough (for a household).This is arithmetic,(but) there is also a chemistry,which they have not done, news agencies quoted Moily as saying in Bangalore on Friday.Though the cap was decided by the Cabinet,Moily said the fuel retailers were free to raise the cap.But it may be difficult for the fuel retailers to do.If oil companies raise the cap on their own obviously under verbal diktat from the parent ministry they may have to bear the loss since the finance ministry would not give them the subsidy amount on additional cylinders supplied at government rate beyond the six-cylinder cap.This would run foul of independent directors on company boards and the federal auditor for causing loss to company 
ndeed,a senior oil ministry official said any decision on changing the cap would have to be taken by the government as a whole.The decision was taken by the government. The Prime Minster and finance minister were involved (in the decision).So the oil ministry may not be able to make any change on its own. The matter has to be taken to the Cabinet. 

We have received complaints regarding the problems being faced by consumers from various quarters. It is a fact that the plan has put consumers to a great deal of hardships.But any raising of cap officially or even scrapping it would ultimately depend on the stand taken by the finance minister and PM, he said.

That the government was losing its nerve on the issue was amply evident when it blocked a hike in the price of non-subsidized cooking gas on Thursday.On Friday, Congress spokesman P C Chacko reinforced this by saying that the government would review the policy at the first possible opportunity.
We said the reduction of subsidized cylinders would burden the common man.So our party president Sonia Gandhi wrote to the partys chief ministers that the cap on subsidised cylinders should be higher.But we understand that the governments hands were tied,it was facing a fiscal crisis and oil companies would have collapsed.It would have led to fuel rationing.

Source: Times of India


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