KEEP THE HOME FIRES BURNING

KEEP THE HOME FIRES BURNING


Effective 1st November, 2018, there is a hike in the LPG gas cylinders, used for domestic consumption. Since June this year this is the steadfast monthly increase every month. The UJJWALA YOJANA scheme was initiated by prime minister  Narendra Modi, with the view to reach this LPG cylinder facility to all women in rural, remote and far-flung areas. This is because cooking is done with wood, coal, causing lungs related damages for many as they are using these day in, day out. He did immense campaign requesting people to give up subsidy on LPG gas cylinders, the concept by which, the poor too can afford to buy at a lesser rate and the balance of the market price is credited to them on a monthly basis, on an assumption that 12 such cylinders with 14.2 KG capacity are consumed in a year. The difference amount is always credited to the consumers’ bank accounts.

The increase for the past six months is owing to the fluctuation in the LPG base price, which is always calculated with the market price of the petrol products, foreign exchange and GST.  Now the scenario is for the subsidised consumers the increase is Rs.2.94 only where as for the non-subsidised consumers the increase is Rs.60 per cylinder. The rate of the cylinders would be Rs.505.34(502.40) for subsidised and for the non-subsidised would be Rs.939 (880). The difference in the amount credited would be 433.66 for the subsidised consumers to their bank account as against Rs.376.60 with effect from 1st November 2018. For the Subsidised consumers’ the increase is only minimal.

The increase in the price happens when the international rates soar the Government has to provide a higher subsidy whereas the LPG cylinder rate has to be derived at the market price as per GST rules. That is, rate of the LPG is always calculated at the market price which is higher and accordingly subsidy has to be raised. Whereas this protection is not given to the Non- subsidised consumers’. So this is a proportionate cycle.

Here is a comparative study of the prices of LPG cylinders 14.2 KG capacity for Subsidised and Non-Subsidised rates for all metros effective 1st November as under inclusive of GST, 

METROS

SUBSIDISED RATE

NON-SUBSIDISED RATE

CHENNAI

493.87

958.00

DELHI

505.34

939.00

MUMBAI

503.11

912.00

KOLKATA

508.70

969.50

 

What was started as a benefit to the poor and needy, now with increase in the cost of the most essential fuel to keep the home fires burning, the Government is slowly feeling the pinch as the rising fuel prices are a matter of concern. That’s because the subsidy saved from the GIVE UP campaign is being wiped off by the higher support it has to give due to the increasing market price. Moreover, the free connections under the UJJWALA YOJANA are costing the Government more than expected.

 

-Vijayashree Ramesh

The writer is an advocate based at Chennai.