Subsidy on LPG, Kerosene to stay, no price hike

New Delhi, Oct 31: The subsidy on domestic LPG and kerosene is sought to be extended indefinitley, official sources today said but ruled out any price hike in these popular fuels.

Petroleum Ministry sources said that they have suggested for extension of government subsidy as the gap between domestic retail price and current international price was too wide to be bridged through a price hike.

Dismantling of the administered pricing mechanism (APM) for petroleum products, subsidy on PDS kerosene and domestic LPG was to be phased out by March 31, 2005. This deadline was extended by two years to March 31, 2007. This time-line would be extended indefinitly.

The total revenue loss of not increasing domestic cooking gas (LPG) and kerosene price in line with rise in cost of production was Rs 27,500 crore in 2006-07. Against this the budgetary subsidy was Rs 2,900 crore.

UNI