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How much does government save on LPG subsidy? A whopping Rs 21K crore

May 04, 2016 14:15 IST

LPG

 

Government has saved over Rs 21,000 crore (Rs 210 billion) in cooking gas LPG subisdy in the last two financial years as paying the dole directly into bank accounts of actual users helped eliminate duplicate connections as well as diversions, Oil Minister Dharmendra Pradhan said on Wednesday.

The government began paying subsidy directly into bank accounts of cooking gas consumers in select districts from November 2014 and in the rest of the country from January 1, 2015.

As on April 1, 2015, there were 18.19 crore (181.9 million) registered LPG consumers and 14.85 crore (148.5 million) active consumers implying a gap of 3.34 crore (33.4 million) consumers which were duplicate, fake or inactive accounts.

"Eliminating such 3.34 crore (33.4 million) consumers helped save Rs 14,672 crore (Rs 146.72 billion) in 2014-15 fiscal (year ending March 31, 2015)," Pradhan said at an seminar on subsidies.

The saving in 2015-16 was about Rs 7,000 crore (Rs 70 billion), lower than the previous fiscal mainly because global oil prices slumped thereby cutting the subsidy required.

"An average of Rs 366 per cylinder subisidy was considered for 2014-15 fiscal," he said. "If we take into account the quota of 12 cylinders per consumer and the average LPG subsidy of Rs 336 per cylinder for the year 2014-15, estimated savings in LPG subsidy due to the blocking of 3.34 crore (33.4 million) accounts works out to Rs 14,672 crore, during that year."

The average subsidy in the following year was lower, he said but did not give exact subsidy number.

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