An unkind cut for cooking gas consumers

A measly ₹ 24.95 grant makes people angry; activists question the pricing mechanism

With liquefied petroleum gas (LPG) consumers receiving just ₹ 24.95 as a subsidy per recharge this month, many are complaining that the drastic cut is hurting them. Customers took to branches to find out why the amount was so lower, given that the price of a domestic bottle in Chennai is ₹ 710.

Last December, when a 14.2kg bottle was priced at Rs 714, the subsidy amount debited from a customer’s bank account was ₹ 174.72. In April 2019, when a top-up was priced at ₹ 722, the grant amount supported by the Center was ₹ 238.27.

As of May 2020, the cost of a bottle in town was ₹ 569 and the grant amount has dropped to zero. As of the following month, the grant amount remained between ₹ 25.45 and ₹ 23.95. However, the cost of the cylinder dropped from ₹ 606 to ₹ 710.

“People fight with our staff because they are used to receiving grants over ₹ 100 every time they book. Even highly educated people wonder why the amount is less. We find it hard to explain to them that distributors have nothing to do with the price of the bottles or the subsidies. Whatever the price, our commission remains the same ”, specifies a distributor in the city.

G. Murugan, a resident of Alwarpet, said he had just paid ₹ 710 for his bottle, but was dejected by the paltry amount given as a grant.

“At a time when the economy is yet to find relief and countless people have lost their jobs or are only partially paid, the government must consider increasing the amount of the grant. It’s a little relief that it can bring to consumers. He very kindly gave free bottles to consumers of Pradhan Mantri Ujwala Yojana for three months during the peak of the COVID-19 lockdown, ”he said. The state has 2.38 crore of LPG consumers, of which 32.42 lakh are PMUY consumers and only 32 lakh have voluntarily waived subsidies.

Oil industry insiders said the amount of the subsidy is set by the Ministry of Petroleum and Natural Gas, and oil companies only charge what they are intended for. And the ministry still says that the prices of liquefied petroleum gas, gasoline and diesel are linked to crude oil prices, they said.

No transparency

Consumer activist T. Sadagopan said the price of LPG was not transparent. “The government gives the retail price, the distributor’s commission, with which they have to cover transportation and office costs, rents, wages and also the 5% GST. They don’t tell you how that price is obtained. It is the same with gasoline and diesel. The government needs to understand that cooking gas is a crucial part of running the home, especially in these difficult times.

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