New Delhi: The Modi government is likely to continue its “bitter pill” treatment to restore the health of the nation’s economy, it is considering a proposal to hike the price of subsidised LPG every month by Rs 5-10 per cylinder and subsidised kerosene by 50 paise to Rs 1 per litre.
The NDA government is trying to emulate the UPA’s decision last year, where diesel prices were hiked every month by 50 paise.
The under-recovery on diesel has come down to Rs 1.62 per litre. Diesel could be deregulated within months if the Iraq crisis does not push up crude oil prices steeply. Petrol was deregulated in 2010.
A staggered increase in LPG and diesel prices will pinch the middle class. There is also the prospect of food prices shooting up due to a poor monsoon.
For kerosene, the under-recovery is Rs 32.87 per litre, and for domestic LPG, Rs 432.71 per cylinder.
The oil marketing companies incur a daily under-recovery of about Rs 249 crore on diesel, PDS kerosene and LPG. The subsidy on the three is is estimated at Rs 115,548 crore; LPG accounts for Rs 50,324 crore and kerosene for Rs 29,488 crore.
