The administered prices of subsidised household fuels has risen sharply, with kerosene up 65% and cooking gas up 17% in the past two years, but the subsidy on both products, which the government tried to cut with regular price hikes, has also risen sharply because of soaring oil prices.
Kerosene, a cooking and lighting fuel which the rural poor purchase from the public distribution system, rose to Rs 25.03 a litre on June 1 in Mumbai from Rs 15.02 a litre on July 1, 2016 as state oil firms are increasing the price by 25 paise every fortnight.
However, the under-recovery or the discount to market rates on the subsidised fuel has increased 54% to Rs 18 per litre from Rs 11.7 per litre in the past two years because of higher oil prices.
In the same period, price of subsidised cooking gas rose Rs 72.39 a cylinder, or about 17%. On June 1, a 14-kg cylinder was priced at Rs 493.55. Subsidy on cooking gas has increased 59% to Rs 205 per cylinder from Rs 129. Read More
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