According to government's decision consumers on exhausting their quota of subsidised cylinders have to buy LPG at the market price of Rs 1258 per cylinder. Subsidized LPG costs Rs 414 per cylinder in Delhi. A major portion of the difference between the actual cost of Rs 1258 and Rs 414 i.e. Rs 844 is paid to the oil companies by the government itself in the form of subsidy.
Only to minimise the burden of this subsidy the government had initially said that each household would get only six subsidised cylinders per year. For rest they had to pay the market price. Under pressure it was later increased to 9 in January 2013 and now it is 12.
Oil minister Moily has himself said that the latest move by the government would increase the annual subsidy burden to around Rs. 80,000 crore.
Speaking on the latest step by the government expert on Oil and Natural Gas sector Kirit Parikh said, “Yes the burden has been increased on the Government by raising the cap on subsidised LPG cylinders from 9 to 12. As it is already in the news that the government is going to have a burden of 5,000 crore more to the exchequer”.
A day before announcing this LPG move, the Congress tried to lure Muslim voters by announcing the launch of National Waqf Development Corporation Limited (Nawadco). And now this announcement of raising the cap LPG cylinder cap all this shown that Congress is trying everything to save their skin in the upcoming elections, and somehow register win in the LS elections 2014.