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After reporting <keyword id="21767878" type="General" weightage="20" keywordseo="record-profits" source="keywords">record profits</keyword>, state-owned <keyword id="20459282" type="General" weightage="100" keywordseo="fuel-retailers" source="keywords">fuel retailers</keyword> <keyword id="19908045" type="General" weightage="20" keywordseo="Indian-Oil-Corporation" source="keywords" meta.keywordsubtype="org" meta.entityname="Indian Oil Corporation" meta.hostid="153" meta.entityid="Indian Oil Corporation">Indian Oil Corporation</keyword> (<keyword id="6354733" type="General" weightage="20" keywordseo="IOC" source="Orion">IOC</keyword>), <keyword id="19908646" type="General" weightage="20" keywordseo="BPCL" source="keywords" meta.keywordsubtype="org" meta.entityname="BPCL" meta.hostid="153" meta.entityid="BPCL">BPCL</keyword> and <keyword id="20052221" type="General" weightage="20" keywordseo="HPCL" source="keywords" meta.keywordsubtype="org" meta.entityname="HPCL" meta.hostid="153" meta.entityid="HPCL">HPCL</keyword> posted up to 90 per cent slump in their June quarter earnings as margins fell and they booked under-recovery on the sale of domestic cooking gas LPG at government-controlled rates. IOC, the nation's largest oil firm, reported 81 per cent drop in standalone net profit in April-June - the first quarter of current 2024-25 fiscal year - to Rs 2,643.18 crore as opposed to a profit of Rs 13,750.44 crore a year back, according to a company filing. Net profit also declined sequentially, when compared to an earning of Rs 11,570.82 crore in March quarter. Hindustan Petroleum Corporation Ltd (HPCL) posted 90 per cent drop in profit to Rs 633.94 crore as compared to an earning of Rs 6,765.50 crore in April-June 2023 and Rs 2,709.31 crore in the preceding March quarter. Bharat Petroleum Corporation Ltd (BPCL) net profit dropped to Rs 2,841.55 crore in April-June from Rs 10,644.30 crore a year back and Rs 4,789.57 crore in January-March, its filing showed. The three fuel retailers made extraordinary gains from holding petrol and diesel prices despite a drop in cost. The price freeze was justified in the name of recovering losses they had suffered in the previous year when they did not raise retail prices despite a surge in cost. The gains arising from the price freeze were eroded with petrol and diesel prices being cut by Rs 2 per litre each just before general elections and a fall in refining margins. Also, the three had uncompensated <keyword id="20866844" type="General" weightage="20" keywordseo="LPG-subsidy" source="keywords">LPG subsidy</keyword> - IOC booking under-recovery of Rs 5,156.23 crore in April-June, BPCL Rs 2,015.10 crore and HPCL Rs 2,443.71 crore, according to the filings. As per an order of the oil ministry, when market determined price (MDP) of LPG cylinders is less than its effective cost to customer (ECC), oil marketing companies (OMCs) have to retain the difference in a separate buffer account for future adjustment. However, as on June 30, 2024, the three firms had a net negative buffer as the retail selling price was less than MDP. The three retailers IOC, BPCL and HPCL had reported record profits totalling about Rs 81,000 crore in FY24 (2023-24), which was far more than their annual earnings of Rs 39,356 crore in pre-oil crisis years. This is because they resisted calls to revert to daily price revision and pass on softening in rates to consumers on grounds that prices continue to be extremely volatile - rising on one day and falling on the other - and that they needed to recoup losses incurred in the year, when they kept rates lower than cost. IOC in 2023-24 posted a standalone net profit of Rs 39,618.84 crore compared to Rs 8,241.82 crore in 2022-23. While the company could argue that FY23 was impacted by the <keyword id="21626914" type="General" weightage="20" keywordseo="oil-crisis" source="keywords">oil crisis</keyword>, the FY24 earnings are higher than even the pre-crisis years - Rs 24,184 crore net profit in 2021-22 and Rs 21,836 crore in 2020-21. BPCL posted a net profit of Rs 26,673.50 crore in FY24, higher than Rs 1,870.10 crore earnings in 2022-23 and Rs 8,788.73 crore in FY22. HPCL's 2023-24 profit of Rs 14,693.83 crore is compared with a Rs 8,974.03 crore loss in FY23 and a profit of Rs 6,382.63 crore in 2021-22, according to the filings. The losses in FY23 had led to the finance minister announcing Rs 30,000 crore equity infusion in the three firms. Mid-way through the year, that support was halved to Rs 15,000 crore. The support was to happen by way of equity infusion via a rights issue. But after the record profits of 2023-24, the equity infusion plan has now been scrapped. Finance Minister Nirmala Sitharaman had on February 1 last year, while presenting the annual Budget for the 2023-24 fiscal (April 2023 to March 2024), announced an equity infusion of Rs 30,000 crore in IOC, BPCL and HPCL to support the three state-owned firm's energy transition plans. In the interim budget that the finance minister presented in February this year ahead of the general elections, the capital support to the three oil companies was halved to Rs 15,000 crore. In the full budget for 2024-25, both plans have been scrapped. While other state-owned oil companies like Oil and Natural Gas Corporation (ONGC) and GAIL (India) Ltd too have lined up billions of dollars of investment to achieve net-zero carbon emissions, the equity support was limited to the three fuel retailers, which had suffered huge losses in 2022 when they held retail petrol, diesel and cooking gas (LPG) prices despite a spike in raw material (crude oil) prices, following Russia's invasion of Ukraine. The board of IOC and BPCL had last year approved rights issues to raise to Rs 22,000 crore and Rs 18,000 crore, respectively. The government was to participate in the rights issue. The three companies, which control roughly 90 per cent of India's fuel market, 'voluntarily' have not changed petrol, diesel and cooking gas (LPG) prices, resulting in losses when input costs were higher and profits when raw material prices were lower. They posted a combined net loss of Rs 21,201.18 crore during April-September 2022 despite accounting for Rs 22,000 crore announced but not paid LPG subsidy for the previous two years. Subsequent softening of international prices and government giving out LPG subsidies helped IOC and BPCL post annualised profit for 2022-23, but HPCL was in the red. In FY24, things changed dramatically, and the three firms posted record earnings.

After record profits, state-owned fuel retailers Indian Oil, BPCL and HPCL see profit slump in Q1

The success of the 'Give-It-Up' campaign on <keyword id="1734460" type="UNKNOWN" weightage="100" keywordseo="cooking-gas-subsidy">cooking gas subsidy</keyword> has prompted the Indian government to ask Indian citizens to voluntarily forego the subsidy they get on railway tickets. The scheme would be launched next month by the railways plans, under which it would offer two "slabs" to surrender 50% and 100% of the subsidy amount. Presently, the national carrier bears 43% of the cost of all rail fares, leading to a loss of about Rs 30,000 crore per year because of the subsidies. Just so the travellers know why they are being asked to give up their subsidy, the railways had started printing a message, that "<keyword id="6355455" type="COMPANY" weightage="100" keywordseo="Indian-Railways">Indian Railways</keyword> recovers only 57% of cost of travel on an average" on computerised tickets. However, unlike the cooking gas subsidy, giving up the railway fare subsidy would be a burden on the passenger’s pocket, because of the huge difference in the cost of the ticket. As per rough estimates, if the cost of a 3AC ticket from New Delhi to Mumbai on a superfast train is Rs 1570, it could rise up to Rs 2,750 after giving up the subsidy. Similarly, a ticket in 2AC in a similar train will cost around Rs 3,990 after giving up subsidy instead of the subsidised price of Rs 2,275.

Consider giving up your rail fare subsidy, says the government

<ul><li>The <keyword id="3351117" type="PERSON" weightage="20" keywordseo="Ujjwala-scheme">Ujjwala scheme</keyword> which provides free cooking gas connections to poor Indian homes has been a big vote gatherer for Narendra Modi.</li><li>The Indian Prime Minister wants to expand the programme to cover 8 million more households in the first 100 days of his second term.</li><li>So far, 72 million households in India have received free cooking gas connections from the government under the subsidy programme launched 3 years ago.</li></ul>The Ujjwala scheme, which provides free cooking gas connections to poor Indian homes, has been a big vote gatherer for Narendra Modi. The Indian Prime Minister wants to expand the programme to cover 8 million more households in the first 100 days of his second term. The scheme, which targets female members of below poverty line families that used conventional coal as cooking fuel, was launched on May 1, 2016 and has covered 72 million homes. The original target was 80 million, which the government wants to cover in the first 100 days. In addition, another 10-20 million new LPG connections would be given in subsequent months to cover all poor households as part of a Cabinet decision taken late last year, the IANS reported. There are about 5-6% of India's household which still do not have access to liquefied petroleum gas (LPG) for cooking, according to government data. The flip side While this move from the government has been lauded by many as a transformational step, it has also been criticised as just half a step. Poor people may have received a free connection and escaped the deadly pollution from the coal used for cooking earlier, the subsequent refills of LPG cylinders have proven too costly. And that may be the focus in the next phase of this programme-- ensuring that people do get a refill and do not go back to coal. The government is also toying with the idea of providing smaller LPG gas cylinders weighing about five kilogrmas (kg) compared to the current one which is 14.2 kg, according to a news agency. This may bring down the cost of refill as well as the burden on the exchequer if the government decides to cover the cost and transfer the money under the direct benefit transfer scheme. Currently, every LPG cylinder costs anywhere between ₹600 and ₹650 in the metro cities of Delhi, Mumbai, Chennai, and Kolkata. After the subsidy under Ujjwala scheme, the cost comes down to a little less than ₹500 per cylinder. The subsidy is transfered directly to the eligible beneficiaries' bank accounts. The money Under the Pradhan Mantri Ujjwala Yojana (PMUY), gas connections are provided to BPL families with a support of ₹1,600 for each connection. The LPG connection is provided in the name of the female member of the family. A sum of ₹8,000 crore was allocated for the scheme to start with but was later expanded to ₹4,800 crore as the target homes increased from 50 million to 80 million. In December, the Union Cabinet also decided to cover all poor households under the scheme that would further increase the number of new connections by 10-20 million. SEE ALSO: <a href="https://www.businessinsider.in/transportation/indian-railways-will-spend-nearly-a-billion-dollars-to-cut-travel-time-between-delhi-mumbai-and-delhi-howrah-by-5-hours/articleshow/70254817.cms" data-type="tilCustomLink" target="_blank">Indian Railways will spend nearly a billion dollars to cut travel time between Delhi-Mumbai and Delhi-Howrah by 5 hours</a>

Narendra Modi aims to offer 8 million more cooking gas connections in the first 100 days of his second term-- and follow it up with smaller cylinders to encourage refills

New Delhi, Apr 1 () The price of non-subsidised LPG, or market-priced cooking gas, on Wednesday was cut by Rs 61.5 per cylinder in line with a fall in benchmark international rates. The price of non-subsidised LPG, which a domestic household consumer buys after exhausting his quota of 12 14.2-kg cylinders at below-market price rates, was cut to Rs 744 in Delhi. This is the second reduction in rates since March, according to a price notification issued by state-owned oil firms. On March 1, non-subsidised LPG price was cut by Rs 53 per 14.2-kg cylinder. This was preceded by a massive Rs 144.5 per cylinder hike in February. The two reductions have not yet brought LPG rates to pre-February hike levels. Cooking gas is available only at market prices across the country. Eligible users, however, get subsidy in their bank account for buying LPG cylinders at subsidised rates. Domestic LPG users are entitled to buy 12 bottles of 14.2 kg each at subsidised rates in a year. Price of 19-kg LPG cylinders, used by commercial establishment, came down to Rs 1,285 from Rs 1,381.50, the notification said. ANZ HRS

Non-subsidised cooking gas price cut by Rs 61.5 per cylinder

New Delhi, Mar 2 () Jet fuel (ATF) prices were on Monday slashed by a steep 10 per cent, the second straight reduction in rates in as many months, as international oil prices slumped on fears of the spread of coronavirus. Simultaneously, the rates of non-subsidised cooking gas (LPG) were cut by Rs 53, wiping away a third of the record Rs 144.50 per cylinder price hike effected last month, according to a price notification issued by state-owned oil firms. Aviation turbine fuel (ATF) price was cut by Rs 6,590.62 per kilolitre (kl), or 10.3 per cent, to Rs 56,859.01 per kl in Delhi. This is the second straight cut in ATF rates. Prices were cut by Rs 874.13 per kl with effect from February 1. The rate of non-subsidised cooking gas (LPG) was also reduced to Rs 805.50 per 14.2-kg cylinder from Rs 858.50 previously. Domestic LPG users are entitled to buy 12 bottles of 14.2 kg each at subsidised rates in a year. Since international oil prices have fallen, the government's subsidy payout will fall by almost Rs 50 per cylinder to Rs 240. Cooking gas is available only at market prices across the country. Eligible users, however, get subsidy in their bank account for buying LPG cylinders at subsidised rates. Price of 19-kg LPG cylinders, used by commercial establishment, came down to Rs 1,381.50 from Rs 1,466, the notification said. ANZ RVK

ATF price cut by steep 10 pc; non-subsidised cooking gas costs Rs 53 less

New Delhi, Feb 1 () Finance Minister Nirmala Sitharaman on Saturday laid down plans for expansion of national natural gas pipeline network to 27,000 km from the present 16,200 km and pricing reforms as the government looks at boosting use of environment friendly fuel.
 The government has set a target of raising the share of natural gas in primary energy basket to 15 per cent by 2030 from current 6.2 per cent. Connecting gas sources to consumption hubs is a key to achieving this.
 Presently, most of the gas pipelines are concentrated in the western and northern part of the country with a few lines in the east and south.
 In her speech while presenting the Budget for 2020-21, Sitharaman said more gas pricing reforms are in the offing.
 "To deepen gas markets in India, further reforms will be undertaken to facilitate transparent price discovery and ease of transactions," she said.
 Presently, the price of natural gas produced domestically is fixed by a formula that averages out rates in gas surplus nations such as Russia and the US.
 "Further, it is proposed to expand the national gas grid from the present 16,200 km to 27,000 km," she said without giving a timeline.
 Oil Minister Dharmendra Pradhan said the Budet lays emphasis on creating next generation financial markets, boosting income and investment and several infrastructural reforms for accelerated economic growth.
 Commenting on the Budget, Nitin Prasad, Chairman, Shell Companies in India said, "The policy reforms announced in the Union Budget by the Finance Minister sustain the Prime Minister's vision for India's journey towards a climate resilient and clean energy society under pinned on electro-mobility, a gas based economy and renewable power delivered through accelerating innovation from start-ups."
 Raju Kumar, Tax Partner, Oil &amp; Gas practice, EY India said the budget announcement of planned increase in natural gas pipeline network and plan to facilitate transparency in price discovery is likely to strengthen the natural gas market in India. "This will also support further expansion of city gas distribution."
 "We are happy that the government has taken a categorical note of the pressing air quality issues in India," said Suyash Gupta, Director General, Indian Auto LPG Coalition (IAC). 
 "While the intent is positive and clear, yet it is important to note that the goal can be met only with more and more vehicles adopting to cleaner fuels such as Auto LPG. The absence of any immediate declaration of incentives for state governments who have been working towards the goal or intend to do so in near future can delay the adoption of cleaner fuels as state level governments may just prefer a 'wait and watch' approach," Gupta said.
 Pankaj Kalra, CFO &amp; Head-Strategy, Essar Exploration &amp; Production, said expansion of gas grid will definitely be a huge opportunity for players in the unconventional hydrocarbon sectors whose assets are mostly classified as stranded because of lack of evacuation infrastructure.
 "As conventional hydrocarbon resources are dwindling and new resource accretions are few and far between, unconventional hydrocarbons, like CBM (as an established source) and Shale Gas (in the long run) will assume greater significance," he said 
 "The gas grid expansion, coupled with the liberal policies introduced over the last few years, will revive investor confidence in the upstream sector," Kalra added.
 K. Ravichandran of ICRA said the Budget proposals for oil and gas industry are positive, which include sufficient allocation of subsidy for the downstream sector, policy support for gas economy and abolition of dividend distribution tax.
 Subsidy provided for cooking fuels for 2020-21 is Rs 38,781 crore, which will leave the downstream oil industry with a backlog of around Rs 11,600 crore by the end of fiscal 2020-21, significantly lower compared to the backlog of Rs 33,000 crore at the beginning of fiscal 2019-20.
 This is on account of lower subsidy required due to fall in oil prices and substantial reduction in kerosene allocation. Actual subsidy required for FY 2019-20 and FY 2020-21 is expected to be Rs 23,600 crore and Rs 27,500 crore, respectively.
 "Abolition of dividend distribution tax (DDT) is a positive as the PSU oil and gas companies pay large dividend and any savings in this regard will be beneficial for them, unless they hike the dividend rate further," he said. ANZ RVK

Gas grid to be expanded to 27,000 km, pricing reforms in offing

<ul><li>The Delhi government has provided 50% subsidy for the consumer using 201-400 units of electricity. </li><li>The consumers will not have to pay any <keyword id="100242" type="PERSON" weightage="20" keywordseo="Electricity-bill">electricity bill</keyword> for using up to 200 units. </li><li>The price of non-subsidised LPG cooking gas will be reduced by Rs 62.50 per 14.2 kg cylinder in New Delhi. </li></ul>The residents of Delhi can breathe a sigh of relief. Chief Minister <keyword id="260213" type="PERSON" weightage="20" keywordseo="Arvind-Kejriwal">Arvind Kejriwal</keyword> government <a href="https://www.ndtv.com/india-news/arvind-kejriwal-says-no-bill-for-electricity-usage-upto-200-units-in-delhi-2078622">announced </a>that its low-end consumers need not pay electricity bills. As per the new tariff policy, <a href="https://www.ndtv.com/delhi-news/no-electricity-tariff-hike-in-delhi-for-5-years-tweets-arvind-kejriwal-2078381">the government won't impose any electricity</a> charges for those consuming 200 units of electricity or less. <div type="twitter" handle="ArvindKejriwal" handlename="Arvind Kejriwal" image="http://pbs.twimg.com/profile_images/945853608389574656/REH_LpUJ_normal.jpg" favoritecount="17150" retweetcount="3019" status="Congratulations Delhi For fifth consecutive year NO electricity tariff hike. On the contrary, for fifth consecutiv… https://t.co/b6jt4jqTij" createdat="1564568739000" id="1156511234881011712"></div>

 New electricity tariffs They have much more subsidies up their sleeve. The Delh<a href="https://twitter.com/ANI/status/1156823259159154688">i government provided 50% subsidy</a> for those consuming between 201-400 units of electricity. Starting August, The consumers will have to pay ₹252 instead of ₹800 for using 250 unit a month. Further, for 300 units, the government will charge ₹526 monthly. <keyword id="75088" type="ORGANIZATION" weightage="20" keywordseo="LPG-cylinders">LPG cylinders</keyword> to cost less This is not the only good news that the national residents received today. The price of non-subsidised LPG cooking <a href="https://www.businessinsider.in/news/lpg-cylinder-prices-cut-by-62-5-in-delhi-rates-effective-from-aug-1/articleshow/70475003.cms">gas will be reduced </a>by ₹62.50 per 14.2 kg cylinder. This is effective August 1, the company said. According to the Indian Oil Corporation, the price reduction comes on the back of prices in the international market and the Dollar-Rupee exchange rate. "Accordingly, the upfront cash payment by the consumers of domestic LPG will also reduce per cylinder. Domestic LPG consumers will now be required to make an upfront cash payment of Rs 574.50 only per 14.2 Kg cylinder in August 2019 in place of Rs 637," IOC said in a statement. (With IANS) See also: <a href="https://www.businessinsider.in/news/lpg-cylinder-prices-cut-by-62-5-in-delhi-rates-effective-from-aug-1/articleshow/70475003.cms">Cooking gas will get cheaper from today in India's national capital</a>.

Double bonanza for Delhi-ites — free power and cheaper gas

New Delhi, Feb 23 () Natural gas prices in India are likely to be cut by a steep 25 per cent beginning April, in line with the slump in global rates, sources said. The price of most of the natural gas produced by state-owned ONGC and Oil India Ltd, which account for the bulk of India's existing gas output, is likely to be cut to around USD 2.5 per million British thermal unit for the six-month period beginning April 1, from USD 3.23 as of now. This will be the second reduction in six months and will reduce rates to the lowest in two-and-half-years. Sources said the price of gas produced from difficult fields too is likely to be cut to USD 5.50 from USD 8.43 per mmBtu now. Prices of natural gas, which is used to produce fertiliser and generate electricity and is also converted into CNG for use in automobiles as fuel and cooking gas for households, are set every six months -- on April 1 and October 1 each year. The rates, besides dictating the price of urea, electricity and CNG, also decide the revenue of gas producers such as Oil and Natural Gas Corp (ONGC). Natural gas price was last cut by 12.5 per cent on October 1. Rates were cut to USD 3.23 per mmBtu from earlier USD 3.69. For difficult fields, the rates were cut from an all-time high of USD 9.32 per mmBtu to USD 8.43. Sources said the reduction would impact revenues of India's biggest producer ONGC as well as Reliance Industries and its partner BP plc which plan to start gas production from their 'second-wave' of discoveries in eastern offshore KG-D6 block from mid-2020. The cut in price will lower the earnings of producers like ONGC but will also lead to a reduction in the price of CNG, which uses natural gas as input. It would also lead to lower cost of natural gas piped to households (PNG) for cooking purposes as well as of feedstock cost for the manufacturing of fertilisers and petrochemicals. ONGC's revenue and earnings from the gas business will fall by around Rs 3,000 crore because of the price cut, sources said. Gas prices in India are determined by taking a volume-weighted annual average of the prices prevailing in Henry Hub (US), National Balancing Point (UK), Alberta (Canada) and Russia with a lag of one-quarter. ONGC is India's largest integrated oil and gas company, accounting for 75 per cent of crude oil and natural gas production by volume, and 17 per cent of domestic refining capacity. Natural gas is a key raw material for the manufacturing of urea and comprises nearly 70 per cent of the total cost of urea production. For the fertiliser sector, nearly 42 per cent of the gas requirement is met through domestic gas, while the remaining is met through regasified liquefied natural gas (R-LNG) imports. The cost of production of urea changes by around Rs 1,600-1,800 per tonne for every USD 1 per mmBtu change. The price cut would thus reduce the subsidy outgo for the government by Rs 800 crore in the first half of FY21, they added. ANZ ABM

Natural gas prices in India likely to be cut by steep 25 pc from April

Directly submitting the benefit into users’ bank accounts has helped eliminate duplicate connections as well as diversions, making the Indian Government save over Rs 21,000 crore in cooking gas <keyword id="6360114" type="ORGANIZATION" weightage="100" keywordseo="LPG">LPG</keyword> subisdy in the last two financial years. 
 
It was from November 2014 that the government has started to submit subsidy amount directly into bank accounts of cooking gas consumers in select districts of India, while from January 1st 2015, the practice was started in the rest of the country. 
 
As on April 1, 2015, there were 18.19 crore registered LPG consumers, while there were 14.85 crore active consumers, which means that 3.34 crore consumers were duplicate, fake or inactive accounts. 
 "Eliminating such 3.34 crore consumers helped save Rs 14,672 crore in 2014-15 fiscal (year ending March 31, 2015)," Oil Minister <keyword id="197418" type="PERSON" weightage="100" keywordseo="Dharmendra-Pradhan">Dharmendra Pradhan</keyword> said at a seminar on subsidies in New Delhi. 
 The year 2015-16 saw savings worth about Rs 7,000 crore, which was lower than the previous fiscal due to a fall in <keyword id="168256" type="UNKNOWN" weightage="100" keywordseo="Global-oil-prices">global oil prices</keyword> that affected the subsidy. 
 
<a href="http://d1pcxoetpnw26i.cloudfront.net/thequint/2015-04/17946c5c-5ea8-4a68-8f3d-f80e1ed33045/cylinder%20crop%20(Reuters).jpg">Image source</a>

Submitting LPG subsidy in bank accounts saved government a whopping Rs 21,000 crore

Believe it or not, <keyword id="113746" type="UNKNOWN" weightage="20" keywordseo="subsidies">subsidies</keyword> worth more than Rs 1 lakh crore are going to the well-off. The <keyword id="3261283" type="UNKNOWN" weightage="20" keywordseo="Economic-Survey-2016">Economic Survey 2016</keyword> vouched that subsidies for the well-off should be cut. 
 
The Economic Survey 2016 stated that Indian state's generosity is not restricted to its poorest citizens. In fact, in many cases, the beneficiaries are disproportionately the well-off. 
 
The survey stated the well-off were enjoying benefits on small savings schemes and tax or subsidy policies on six commodities -- cooking gas, railways, power, aviation turbine fuel, gold and kerosene. 
 
"We find that together these schemes and policies provide a bounty to the well-off of about Rs 1 lakh crore," the survey said, adding that these incentives benefit not the middle class but also the very top end of the income distribution. 
 
Modi had last month compared subsidies for the poor with tax breaks for the rich, saying "When a benefit is given to farmers or to the poor, experts and government officers normally call it a subsidy. However, I find that if a benefit is given to industry or commerce, it is usually called an 'incentive' or 'subvention'. We must ask ourselves whether this difference in language also reflects a difference in our attitude? Why is it that subsidies going to the well-off are portrayed in a positive manner?" 
 
The Economic Survey today said the Rs 1 lakh crore of subsidy going to the better-off merely on account of 6 commodities plus the small savings schemes represent a substantial leakage from the government's kitty, and an opportunity foregone to help the truly deserving. 
 
Among six commodities, the maximum subsidy to the rich is for LPG at Rs 40,151 crore followed by electricity Rs 37,170 crore, Kerosene Rs 5,501 crore, Gold Rs 4,093 crore, Railways Rs 3,671 crore and ATF Rs 762 crore. 
 
While subsidy on account of Public Provident Fund is Rs 11,900 crore taking the total to Rs 1,03,249 crore.

Rs 1 lakh crore worth subsidies going to the well-off, people who really don’t need them

Union <a href="http://www.businessinsider.in/searchresult.cms?query=dharmendra+pradhan">Oil Minister Dharmendra </a><a href="http://www.businessinsider.in/searchresult.cms?query=dharmendra+pradhan">Pradha</a>n announced the government has capped subsidy payout domestic cooking gas, or <a href="http://www.businessinsider.in/searchresult.cms?query=LPG">LPG</a>, at Rs 18 per kg. 
 
The government had capped <a href="http://www.businessinsider.in/Finance-Ministry-fixes-kerosene-subsidy-at-Rs-12-per-litre/articleshow/48331153.cms">kerosene subsidy at Rs 12 per litre</a>. 
 
Kerosene through <a href="http://www.businessinsider.in/searchresult.cms?query=PDS">Public Distribution System</a> (PDS) is sold at Rs 14.96 per litre against the actual cost of Rs 29.91 and this cost difference is termed as under-recovery or revenue loss. 
 
While the government will provide Rs 12 to meet most of this, the remaining Rs 2.95 will be borne by oil producers <a href="http://www.businessinsider.in/searchresult.cms?query=ONGC">ONGC</a> and Oil India Ltd, said Pradhan. 
 
Likewise, there is an under-recovery or loss of Rs 167.18 on sale of every 14.2-kg subsidised LPG cylinder, which is sold at the current price of Rs 417.82. 
 
“At present, the state-owned fuel retailers incur under-recoveries on sale of PDS kerosene and subsidised domestic LPG only as petrol and diesel have been deregulated (market-linked) with effect from June 2010 and October 2014 respectively,” said Pradhan. 
 
He added for 2015-16, the government has approved budgetary support for PDS kerosene under-recovery at a rate of Rs 12 per litre and the remaining under-recovery will be borne by the upstream companies. 
 
Reportedly, for the first quarter of financial year 2016, the government will provide Rs 1,733 crore cash subsidy as per the new formula to Indian Oil Corp (IOC), Rs 404 crore to Bharat Petroleum Corp Ltd (BCPL) and Rs 451 crore to Hindustan Petroleum Corp Ltd (HPCL). 
 
Twelve LPG cylinders of 14.2-kg are supplied to every household at a subsidised rate of Rs 417.82 and LPG consumers get subsidy equivalent to the under-recovery directly in their bank accounts so that they can purchase a 14.2-kg bottle at market price of Rs 585. 
 
(Image: Indiatimes)

You Searched For "cooking gas subsidy" and got 11 results

After record profits, state-owned fuel retailers Indian Oil, BPCL and HPCL see profit slump in Q1

PTI

Consider giving up your rail fare subsidy, says the government

BI India Bureau

Narendra Modi aims to offer 8 million more cooking gas connections in the first 100 days of his second term-- and follow it up with smaller cylinders to encourage refills

Sriram Iyer

Non-subsidised cooking gas price cut by Rs 61.5 per cylinder

PTI

ATF price cut by steep 10 pc; non-subsidised cooking gas costs Rs 53 less

PTI

Gas grid to be expanded to 27,000 km, pricing reforms in offing

PTI

Double bonanza for Delhi-ites — free power and cheaper gas

Preeti Soni

Natural gas prices in India likely to be cut by steep 25 pc from April

PTI

Submitting LPG subsidy in bank accounts saved government a whopping Rs 21,000 crore

BI India Bureau

Rs 1 lakh crore worth subsidies going to the well-off, people who really don’t need them

BI India Bureau

After kerosene, government caps LPG subsidy at Rs 18 per kg

BI India Bureau

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