The government has suddenly withdrawn the decision to increase the rate of LPG cylinder, taking a big decision. This step has been taken to increase the cost of LPG cylinders every month, and the government plans to provide free LPG connections to the poor, instead of 'Ujjwala'. Earlier, the government had directed all public sector petroleum companies to increase the LPG cylinders by four rupees every month from June 2016.The motive behind this was to finally end the subsidy given on LPG. One source said that this order has been withdrawn in October. Due to this, Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) have not raised the cost of LPG since October. Earlier this year, Petroleum companies were allowed to increase the price of 14.2 kg LPG cylinder for two months (not including VAT) from July 1, 2016.
After this, petroleum companies had increased the LPG price on 10 occasions. Each family receives 12 subsidized cylinders in a year. If needed, more cylinders are available at the market price. On May 30, 2017, the monthly increase in LPG prices was doubled to 4 rupees. Petroleum companies were given the right to raise four rupees in LPG prices every month from 1st June, 2017. The purpose of this increase was to bring the government subsidy on the domestic cylinders to zero. This work was to be done till March 2018.
The source said that this order was indicating the opposite of the government's bright plan. While the government is giving free LPG connections to the poor, on the other hand the price of the cylinders is being increased every month. This order has been withdrawn for improvement. The source said that even after October, the cost of LPG has increased, its main reason is taxation issue. After implementation of Direct Benefit Transfer (DBT), the issue of taxation is made.In this scheme, the customers are directly given the amount of subsidy in their accounts and they have to buy at the LPG cylinders market price. Prior to DBT, the LPG subsidy was available to the dealers. VAT was levied on this subsidized price. Now LPG is available only on market value and it looks like GST. The source said that apart from being more than the subsidized price, market value changes every month. In order to include taxes, its retail price has to be changed. In the last 17 months, LPG prices have increased by Rs 76.5 in 19 installments.
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After this, petroleum companies had increased the LPG price on 10 occasions. Each family receives 12 subsidized cylinders in a year. If needed, more cylinders are available at the market price. On May 30, 2017, the monthly increase in LPG prices was doubled to 4 rupees. Petroleum companies were given the right to raise four rupees in LPG prices every month from 1st June, 2017. The purpose of this increase was to bring the government subsidy on the domestic cylinders to zero. This work was to be done till March 2018.
The source said that this order was indicating the opposite of the government's bright plan. While the government is giving free LPG connections to the poor, on the other hand the price of the cylinders is being increased every month. This order has been withdrawn for improvement. The source said that even after October, the cost of LPG has increased, its main reason is taxation issue. After implementation of Direct Benefit Transfer (DBT), the issue of taxation is made.In this scheme, the customers are directly given the amount of subsidy in their accounts and they have to buy at the LPG cylinders market price. Prior to DBT, the LPG subsidy was available to the dealers. VAT was levied on this subsidized price. Now LPG is available only on market value and it looks like GST. The source said that apart from being more than the subsidized price, market value changes every month. In order to include taxes, its retail price has to be changed. In the last 17 months, LPG prices have increased by Rs 76.5 in 19 installments.
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