According to the budget documents presented in Parliament, no provision has been made for payment of subsidy on kerosene in the Union Budget for 2021-22. Ration card holders will not get any subsidy on kerosene in the financial year starting from April 1, 2021.
There is big news for ration card holders. The government has abolished the subsidy on poor man’s fuel kerosene through a slight increase in prices. The price of fuel sold through the Public Distribution System (PDS) has now hit market rates. According to the budget documents presented in Parliament, no provision has been made for payment of subsidy on kerosene in the Union Budget for 2021-22. Ration card holders will not get any subsidy on kerosene in the financial year starting from April 1, 2021.
According to the documents, the subsidy on kerosene was Rs 2,677.32 crore in the current fiscal year ending on 31 March, compared to Rs 4,058 crore in the previous financial year. According to industry sources, in 2016, the government allowed government oil marketing companies to raise the price of kerosene by 25 paise per fortnight to cut the subsidy burden.
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The subsidy was scrapped by February last year. Within four years, all prices were increased by Rs 23.8 per liter. In Mumbai, there was an increase from Rs 15.02 per liter to Rs 36.12 per liter. Subsequently, PDS rates have been revised monthly along with benchmark international oil prices. Rates fell to Rs 13.96 per liter in May 2020, but have since more than doubled to Rs 30.12 per liter. In the final price hike in January, rates rose by Rs 3.87 per liter.
Free LPG connection reduced kerosene consumption
Let us know that kerosene is used by ration card holders for cooking and lighting, but its consumption has reduced due to 8 crore free LPG connections given to poor families. According to the Petroleum Planning and Analysis Cell (PPAC) of the Oil Ministry, kerosene consumption saw a de-growth of 28.4 percent in April-December 2020.
According to the PPAC, the states of Andhra Pradesh, Delhi, Haryana and Punjab have been declared kerosene free while Gujarat, Bihar, Uttar Pradesh and Maharashtra have voluntarily surrendered a certain amount of PDS kerosene allocation.
Subsidy on petrol and diesel ends
Petrol price was deregulated in June 2010, diesel rates were also freed in October 2014. This meant that the subsidy on both fuels ended. Subsidies continued only on LPG (LPG) and Kerosene. On LPG, the budget 2021-22 provided a subsidy of Rs 12,480 crore, which is Rs 25,520.79 crore less than the current financial year and Rs 35,605 crore less than the previous year.
