Wednesday, February 13, 2013

LPG relief for Akshaya Patra kitchens

NEW DELHI: It appears to be one step forward and two steps back for the government in so far as pruning of fuel subsidy bill is concerned. The latest example is the oil ministry's order asking state-run fuel retailers to supply cooking gas cylinders at subsidized rate to non-domestic consumers such as canteens, medical institutions and mid-day meal kitchens.
The order on cooking gas, issued on Tuesday, comes close on the heels of exemption to fishermen from paying market price for diesel. The ministry last week announced that fishermen would be treated as individual consumers and could buy fuel for their vessels at subsidized rates charged at petrol pumps.
Till now non-domestic exempt category - called NDEC in industry parlance - consumers in Delhi paid Rs 1,108 for a 14.2-kg cylinder. They would now pay Rs 410.50, which is the rate domestic consumers pay for a refill till the annual six-cylinder cap on subsidized refills. Because the cap will also apply to NDEC consumers, they would now pay Rs 942 for a cylinder ordered beyond the cap, just like domestic consumers. Commercial cylinders of 19 kg cost Rs 1,555 in Delhi.
As is seen from the price differential, the latest order on cooking gas would bring relief to NDEC consumers. It would also ease pressure for additional funds from within the sections of the government to meet higher cost of mid-day meal schemes and kitchen bills of paramilitary forces.
But industry watchers said the exemption would also dent the government's efforts at pruning fuel subsidy bill. "The government in its wisdom had created this slab of consumers to shave subsidy without hurting too much the activities that are not purely commercial and largely for welfare. But the government would now have to pay subsidy for cylinders supplied to them as well," one analyst said.
While putting the annual cap on the number of subsidized refills - six refills that is to go up to nine from April 1 — for each household last September, the government had created four categories of consumers - domestic subsidized, domestic non-subsidized, non-domestic exempt category and commercial.

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