Rich should not buy subsidised LPG, says minister

In a bold suggestion, RPN Singh said that affluent people should voluntarily stop buying subsidised LPG and said he will be the first person to pay market price for the fuel, which is `287 per cylinder more than the current rate.

Speaking at the 10th Petro India conference, Singh said subsidised domestic LPG was meant only for the poor and the needy and the rich “should take the initiative voluntarily to give up subsidised LPG.”

A 14.2-kg bottle or cylinder of LPG costs `399.26 in Delhi and `398.45 in Mumbai for both people below the poverty line and the super-rich. State-owned oil firms lose about `75 crore per day on selling the fuel below its market price of `686.26 per cylinder.

“I will be the first person (to give up subsidised LPG) the day the scheme comes into being,” he told reporters later.

The idea is to replicate what happened some years back, when people who could afford it stopped buying foodgrains from PDS shops despite having ration cards.

Singh’s idea is to first have ministers, MPs, bureaucrats and the senior management of public sector companies give up subsidised LPG voluntarily.

Taking the cue, other sections like corporate honchos and businessmen who can afford market price would also give up subsidised LPG, he said.

The minister said modalities of how his suggestion can be implemented would be discussed within the ministry and with stakeholders before it is implemented.

One way could be that affluent continue buying subsidised LPG and pay the difference between the market price to the oil companies directly through cheques. The other way would be that these classes start buying the blue-coloured 19-kg cylinders that are currently being sold at market price.

Singh said the fuel subsidy bill for 2011-12 fiscal is projected at a whopping `132,000 crore and such bold moves are needed to cut this down.

Besides LPG, diesel is currently sold at discounted rates, with the difference between the retail price and the market price being `13.53 per litre, while kerosene is sold at a discount of `29.99 a litre.

“We need to do away some subsidies... lot of people do not need subsidies in LPG,” he said.

The government had in June last year deregulated pricing of petrol, but the same is not being contemplated in diesel as it would have a cascading effect on general prices, he said.

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