Government may phase out kerosene subsidy by 2020

Local residents wait outside a closed ration shop with their empty containers to collect kerosene in Kolkata September 16, 2010. India's food price index rose 15.10 percent while the fuel price index climbed 11.48 percent, in the year to September 4, under a new series with different base year, components and weightings, government data on Thursday showed. REUTERS/Rupak De Chowdhuri (INDIA - Tags: BUSINESS ENERGY) - GM1E69G19DW01

The government may phase out kerosene subsidy by 2020 as the goals set under the NDA government’s flagship programmes, Pradhan Mantri Ujjwala Yojana (PMUY) and Saubhagya are set to get completed in the next two years, reports Business Standard.

Kerosene consumption has been coming down gradually, with penetration of liquefied petroleum gas (LPG) reaching 95 percent of below poverty line (BPL) households under PMUY. This, coupled with 100 percent electrification of both rural and urban households by 2020 would provide the government with an opportunity to do away with subsidy by then, an official told the financial daily.

The subsidy on LPG and kerosene for the first half of FY18 was Rs 9,079 and is likely to rise further with the increase in global crude prices.

The Petroleum Planning and Analysis Cell (PPAC) report said states like Andhra Pradesh, Chandigarh, Delhi, Dadra & Nagar Haveli, Daman & Diu, Haryana, Lakshadweep, Puducherry and Punjab saw no take off of kerosene for October. For the April to October period, consumption has fallen by 33.7 percent against last year.

Prime Minister Narendra Modi on May 1, 2016, launched the Pradhan Mantri Ujjwala Yojana providing 5 crore LPG connections to BPL families with a support of Rs 1,600 per connection in the next three years.

As of now, 31.9 million consumers have been under the PMUY.