The central government has reduced the budget for petroleum subsidy for the financial year 2022. On the other hand, it has also announced to increase the number of beneficiaries under the Ujjwala scheme. Actually, the government is moving towards ending the subsidy on LPG completely.
New Delhi. The Ministry of Finance has reduced the petroleum subsidy to Rs 12,995 crore for the financial year 2022. This reduction has been made in the subsidy budget when the government has also talked about adding one crore beneficiaries under the Ujjwala scheme. In fact, the government hopes that by increasing the prices of LPG Cylinder, the subsidy burden on it will be reduced. A Mint report quoted a government official as saying that the government was moving towards ending subsidies. This is the reason why the prices of kerosene oil and LPG are constantly increasing. This will continue in the next financial year also.
Crude oil prices are increasing in the international market as well as the prices of petroleum products are also increasing. However, cooking gas is not directly related to the rise in the price of crude oil. Last year too, there was a steady increase in the price of cooking gas. Compared to the increase in the price of petrol, it is less. A similar situation can be seen next year.
Only retail fuel vendors revise the price of LPG cylinders. It mainly depends on the international benchmark of LPG and the exchange rate of the rupee against the dollar.
the financial burden reduced by revising the price of petrol-diesel every day,
tell that petrol from January 1, 2015 -Diesel prices are revised daily. This has helped in reducing the financial burden on the government on petroleum subsidy. Now it is only about kerosene and LPG. The government sends subsidy amount for LPG directly to the beneficiaries account under direct benefit transfer, but kerosene is sold at a discounted rate through the public distribution system.
How much did the government gain?
The 15th Finance Commission report said, ‘After these measures, the revenue receipt through petroleum subsidy has come down from 1.6% in 2011-12 to 9.1% in 2011-12. During this period, it has come down from 0.8 percent to 0.1 percent according to GDP. Kerosene subsidy was Rs 28,215 crore in 2011-12, which has come down to Rs 3,659 crore in the budget estimate for the financial year 2020-21.
after Ujjwala scheme, the subsidy burden can be reduced
The Finance Commission has said in its report that Ujjwala scheme can increase the burden of LPG subsidy. But, the subsidy scheme is confined to the poor or it can be reduced by capping the number of subsidized cylinders. Let us know that the Ujjwala scheme was launched on 1 May 2016 so that the health of women and children can be protected. At present, under this scheme, families living below the poor line are given Rs 1,600 for LPG gas connection.