Short Note: Current Government policy on LPG Subsidy

What is the current government policy on LPG subsidy? Why have the companies been asked to hike the LPG prices by Rs. 4 per month?

The current government provides a subsidy of around Rs 58 on LPG cylinders used for domestic purposes and around Rs 28 is borne by the oil marketing companies. as per an order by the government in the month of May, PSUs were permitted to increase the prices of subsidised LPG cylinder at a rate of Rs 4 per month which will not include the Value Added Tax. The current policy aims to continue the subsidy for the poor.

The reason why the Public-sector undertakings (PSUs) have been asked to revise the rate of LPG cylinder is that the government wished to end the subsidy on a gas cylinder by March. Even though the government has allowed to the PSUs to increase the prices the subsidy on for the poor in commodities like kerosene and LPG will continue. Before the roll out of GST there was zero excise duty but after the introduction of GST a 5% tax was levied on subsidised LPG.

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