Subsidies on LPG,K-Oil should be charged to the budge: Parikh

New Delhi, Sep 3 (UNI) Subsidies on LPG and kerosene should be charged directly to the budget and not loaded on to the back of oil companies, Planning Commission Member Dr Kirit Parikh has said.

The Petroleum and Natural Gas Ministry could bid out available subsidies for LPG and kerosene to obtain the lowest price at which a given amount of these products could be supplied to a defined number of targeted beneficiaries or on the basis of the minimum subsidy at which these could be supplied in specified quantities and at specified price to the targeted number of beneficiaries, Dr Parikh said.

The high price difference betwen keorosene and diesel (Rs 21 per litre in 2005-06) leads to large-scale diversion of kerosene from the public distribution system to adulteration of diesel.

Dr Parikh said the differential pricing of LPG for domestic and commercial use leads to leakages, increasing the burden on subsidies.

To ensure that the subsidised supply of kerosene and LPG only goes to the targeted beneficiaries, Dr Parikh said the possibility of introducing smart cards should be explored.

'' The mechanism for subsidised supply of kerosene and LPG needs to be revised to make it transparent and directed only to the targeted beneficiaries'' Dr Parikh said.

For this purpose, the possibility of introducing a coupons or smart cards directed to the intended beneficiaries should be explored, Mr Parikh said in his latest report on the Integrated Energy Policy. He said this would eliminate dual prices for kerosene and LPG in the market.

On pricing of petroleum products, Dr Parikh said the full price competition at the refinery gate and at the retail level for all petroleum products should be pursued.

He said differential pricing in different markets may be permitted to reflect the cost of supply.

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