An unkind cut for consumers of cooking gas

A meagre subsidy amount of ₹24.95 angers people; activists question pricing mechanism

With liquefied petroleum gas (LPG) consumers getting just ₹24.95 as subsidy per refill this month, many of them are complaining that the drastic cut is hurting them. Customers have been visiting the agencies to find out why the amount was so less, considering that the price of a domestic cylinder in Chennai is ₹710.

Last December, when a 14.2 kg cylinder was priced at Rs.714, the subsidy amount debited to a customer’s bank account was ₹174.72. In April 2019, when a refill was priced at ₹722, the subsidy amount borne by the Centre was ₹238.27.

In May 2020, the cost of a cylinder in the city was ₹569 and the subsidy amount dropped to zero. From the next month onwards, the subsidy amount remained between ₹25.45 and ₹23.95. However, the cost of the cylinder has risen from ₹606 to ₹710.

“People are fighting with our staff since they are used to getting subsidy amounts of above ₹100 each time they book. Even the very educated people are asking why the amount is less. We are having a tough time explaining to them that the distributors have nothing to do with cylinder pricing or the subsidies. Whatever the price, our commission remains the same,” said a distributor in the city.

G. Murugan, a resident of Alwarpet, said he had just paid ₹710 for his cylinder but was dejected at the paltry amount being given as subsidy.

“At a time when the economy is yet to see any relief and countless people have lost jobs or are getting only partially paid, the government must consider raising the subsidy amount. That is a small relief that it can give consumers. It very kindly gave free cylinders to the Pradhan Mantri Ujwala Yojana consumers for three months during the peak of the COVID-19 lockdown,” he pointed out. The State has 2.38 crore LPG consumers, of which 32.42 lakh are PMUY consumers and only some 32 lakh have given up subsidies voluntarily.

Oil industry insiders said the subsidy amount is fixed by the Ministry of Petroleum and Natural Gas and the oil companies only charge what they are directed to. And the Ministry always says prices of liquefied petroleum gas and petrol and diesel are connected to the prices of crude oil, they said.

No transparency

Consumer activist T. Sadagopan said the pricing of LPG was not transparent. “The government gives the retail selling price, the commission of the distributor, with which they have to cover transportation and office charges, rents, salaries and also the 5% GST. They don’t tell you how that price is arrived at. It is the same case with petrol and diesel. The government must understand that cooking gas is a crucial input to running the home, especially during these tough times.”

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