There has been a substantial reduction in oil subsidy during 2015-16. Official figures available for the first nine months show that as against the oil subsidy bill (on diesel, LPG and kerosene) of Rs 76,308 crore for the 12 months period during 2014-15, the subsidy outgo in the first nine months of 2015-16 (April 1, 2016 to December, 31, 2015) is Rs 22,085 crore—a clear indication of the fact that the year 2015-16 will close at a substantially lesser oil subsidy bill.
A major contributor to this subsidy reduction is the government’s “Give It Up” scheme. As on date more than 1 crore LPG customers have given up LPG subsidy under the ‘GiveItUp’ campaign. The approximate annual subsidy saving is likely to be in the range of Rs. 1668 crore (approx.) assuming an average subsidy of Rs. 139 per cylinder. The ‘GiveItUp’ campaign is a continuous process and wide publicity is given for voluntarily surrender of subsidy.
To provide clean fuel to every household in the country, Public Sector Oil Marketing Companies (OMCs) propose to release 10 crore new LPG connections during 2016-19 in mission mode. Out of these 10 crore new connections, 5 crores will be released free of cost to women belonging to the Below Poverty Line (BPL) families under Pradhan Mantri Ujjwala Yojana (PMUY) Scheme.
Direct Benefit Transfer Scheme (PAHAL) scheme that was launched in the entire country from 1st January 2015 —wherein the subsidy on Domestic LPG is provided only to the eligible consumer directly in their bank account.
Further, on 28th December 2015, the Government decided that the benefit of the LPG subsidy will not be available for LPG consumers if the consumer or his/her spouse had taxable income of more than Rs 10,00,000/- during the previous financial year computed as per the Income Tax Act, 1961. The quota of PDS Kerosene has been rationalized over the years resulting in reduction in subsidy.
Subsidy/ Under-recovery on Petroleum Products
|Diesel – Under-recovery of OMCs||92,061||62,837||10,935*|
|Under-recovery of OMCs||29,410||30,574||24,799||9,993|
|PDS Kerosene and Domestic LPG Subsidy Scheme, 2002||741||676|
|Freight Subsidy (For Far-Flung Areas) Scheme, 2002||5||5||5|
|Total Subsidy on PDS Kerosene||30,156||31,255||24,804||9,993|
|Under-recovery of OMCs||39,558||46,458||36,580||8|
|PDS Kerosene and Domestic LPG Subsidy Scheme, 2002||1,989||1,904|
|Freight Subsidy (For Far-Flung Areas) Scheme, 2002||18||16||18|
|Total DBTL Subsidy (claims)||3,869||3,971||12,084|
|Total Subsidy on Domestic LPG||41,565||52,247||40,569||12,092|
|Total Subsidy/ Under-recovery on Petroleum Products||163,782||146,339||76,308||22,085|
* up to 18.10.2014 only
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