Lok Sabha Question No. 5015 (UNSTARRED), answered on 2018-03-26
Subject: Subsidy to OMCs
Ministry: PETROLEUM AND NATURAL GAS
Asked by: RAMA DEVI, MANSUKHBHAI DHANJIBHAI VASAVA

## LOK SABHA UNSTARRED QUESTION NO. 5015 TO BE ANSWERED ON 26 TH  MARCH, 2018

## SUBSIDY TO OMCS

†5015.

SHRIMATI  RAMA  DEVI: SHRI  MANSUKHBHAI  DHANJIBHAI  VASAVA:

## पेोलयम और ाकृ तक गैस मंी

## Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:

- (a) whether the Government is providing subsidy to Oil Marketing Companies and if so, the details thereof along with the quantum of subsidy provided by the Government during the last three years and the current year, OMC-wise;
- (b) the OMC-wise plan and non-plan expenditure incurred during the said period;
- (c)  the  rationale  behind  providing  subsidy  by  the  Government  to  profit  making  companies and the reaction of the Government thereto; and
- (d) the corrective steps taken by the Government in this regard?

## ANSWER पेोलयम और ाकृ तक गैस मंी (ी धम धान)

## MINISTER OF PETROLEUM AND NATURAL GAS (SHRI DHARMENDRA PRADHAN)

- (a): The  Government  provides  the  subsidy  to  the  consumers  of  PDS  Kerosene  and Domestic LPG through Public Sector Oil Marketing Companies.

The  year-wise  subsidy/  under-recovery  on  Subsidized  Domestic  LPG  and  of  PDS Kerosene for the last three years and the current year is given as under:

## (Rs. Crore)

| Particulars                                                                                                                                           | 2014-15                                                                                                                                               | 2015-16                                                                                                                                               | 2016-17                                                                                                                                               | Apr-Dec'17                                                                                                                                            |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
| PDS Kerosene #                                                                                                                                        | 24804                                                                                                                                                 | 11496                                                                                                                                                 | 8455                                                                                                                                                  | 3275                                                                                                                                                  |
| Domestic LPG #                                                                                                                                        | 40569                                                                                                                                                 | 16074                                                                                                                                                 | 14566                                                                                                                                                 | 14,172                                                                                                                                                |
| # Includes Subsidy under 'PDS Kerosene and Domestic LPG Subsidy Scheme, 2002' & 'Freight Subsidy (For Far-Flung Areas) Scheme, 2002' on payment basis | # Includes Subsidy under 'PDS Kerosene and Domestic LPG Subsidy Scheme, 2002' & 'Freight Subsidy (For Far-Flung Areas) Scheme, 2002' on payment basis | # Includes Subsidy under 'PDS Kerosene and Domestic LPG Subsidy Scheme, 2002' & 'Freight Subsidy (For Far-Flung Areas) Scheme, 2002' on payment basis | # Includes Subsidy under 'PDS Kerosene and Domestic LPG Subsidy Scheme, 2002' & 'Freight Subsidy (For Far-Flung Areas) Scheme, 2002' on payment basis | # Includes Subsidy under 'PDS Kerosene and Domestic LPG Subsidy Scheme, 2002' & 'Freight Subsidy (For Far-Flung Areas) Scheme, 2002' on payment basis |

(b): Plan and Non-Plan expenditure of Public Sector OMCs during 2014-15 and 2015-16 are given at the Annexure.  For the year 2016-17 onwards Plan and Non- Plan distinction has been done away with and total expenditure is given in the Annexure.

(c) & (d): As mentioned above, in order to insulate the common man from the impact of rise  in  international  oil  prices,  Government  provides  subsidy  to  the  consumers  of  PDS Kerosene and Domestic LPG through Public Sector Oil Marketing Companies.

With  a  view  to  ensure  that  subsidies  are  targeted  towards  the  really  needy,  the Government has taken following steps:-

- (1) Kerosene :Ministry  of  Petroleum  &  Natural  Gas  has  launched  Direct  Benefit Transfer in  PDS  Kerosene (DBTK) Scheme with effect from 01.04.2016.  The need to implement  DBTK was felt  to  initiate  reforms  in  Allocation  and  Distribution  of  Public Distribution System (PDS) Superior Kerosene Oil (SKO) distribution system, to stop pilferage of subsidy and to reduce the outflow of Central subsidy on kerosene to States / Union Territories (UTs) to a  realistic  level. Under the DBTK, PDS Kerosene is sold to the identified beneficiaries at  non-subsidized  rates  and  the  applicable  subsidy  is  directly  transferred  into  the  bank account  of  the  beneficiaries.  Jharkhand  has  become  the  first  State  in  the  country  to implement DBTK in all the districts of the State.
- (2) LPG

(i)   PAHAL:The  Government  has  introduced  targeted  subsidy  delivery  to  LPG consumers  through  PAHAL.  Applicable  subsidy  is  directly  transferred  into  the  bank account of the beneficiaries.  As on 9.3.2018, 20.01crore customers are getting subsidy in their bank account. PAHAL has helped in identifying 'ghost' accounts, multiple accounts and inactive accounts.

- (ii)    Rationalisation of LPG subsidy : Higher Income Group

Government  has  taken  steps  to  rationalise  the  subsidy  outgo  by  excluding  such  LPG consumers or his/her having spouse taxable income of above Rs 10 lacs from availing LPG  subsidy  w.e.f.  1.1.2016.  Necessary  operational  guidelines  have  been  issued  to OMCs to give effect to the direction of the Ministry. As on 1.3.2018 more than 8.04 lacs customers have been identified with the help of Income Tax Department having taxable income above 10 lacs and all have been excluded from availing subsidy.

- (iii)     GiveitUp Campaign

As  a  part  of  subsidy  management,  Hon'ble  Prime  Minister  gave  call  to  well-off  LPG consumers  to  voluntarily  surrender  their  subsidy  by  launching  'GiveItUp'  campaign. GiveItUp campaign has evoked huge response from socially committed individuals and has  resulted  in  more  than  one  crore  consumers  giving  up  their  subsidy  voluntarily. GiveItUp campaign has heralded new chapter in social 'volunteerism' by the citizens of this country and has set a new benchmark of public good delivery mechanism.

Annexure

Annexure referred to in reply to part (b) of the Lok Sabha Unstarred Question No. 5015 asked  by  Shrimati    Rama    Devi  and  Shri    Mansukhbhai    Dhanjibhai    Vasava  to  be answered on 26 th March, 2018 regarding 'Subsidy to OMCs'.

Plan and Non-Plan Expenditure of Public Sector OMCs during 2014-15, 2015-16, 2016-17 and during 2017-18 (Provisional):

(Rs. Crore)

| Company   | 2014-15   | 2014-15   | 2015-16   | 2015-16   | 2016-17   | 2017-18             |
|-----------|-----------|-----------|-----------|-----------|-----------|---------------------|
|           | Plan      | Non- Plan | Plan      | Non- Plan | Total     | Total (Provisional) |
| HPCL      | 2669.61   | 2182.77   | 1427.86   | 4489.88   | 5757.26   | 5242.66             |
| BPCL      | 6874.75   | 3084.44   | 8287.18   | 3072.62   | 16948.55  | 7800.64             |
| IOCL      | 14313.68  | 2606.50   | 11484.74  | 2883.84   | 20736.93  | 20161.79            |