Lok Sabha Question No. 3661 (UNSTARRED), answered on 2023-08-10
Subject: Petroleum Products on Subsidised Rates
Ministry: PETROLEUM AND NATURAL GAS
Asked by: Sougata Ray

## LOK SABHA UNSTARRED QUESTION NO. 3661

## TO BE ANSWERED ON 10 AUGUST, 2023

## Petroleum Products on Subsidised Rates

3661. PROF. SOUGATA RAY:

## पेोलयम और ाक ृतक गैस मंी

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

(a) whether the Government has any proposal to distribute petroleum products at subsidised rates to  the  people  living  below  poverty  line  and  if  so,  the  details  thereof  and  if  not,  the  reasons therefor;

(b) the status of biodiesel production in the country; and

(c) whether the Government proposes to bring uniformity in the prices of petroleum products in the country and if so, the details thereof?

## ANSWER

## पेोलयम और ाक ृतक गैस मंालय म राय मंी ( ी रामे वर तेल )

## MINISTER OF STATE IN THE MINISTRY OF PETROLEUM AND NATURAL GAS (SHRI RAMESWAR TELI)

(a): Prices of petrol and diesel in the country have been market-determined with effect from 26.06.2010 and 19.10.2014 respectively. Since then, the Oil Marketing Companies (OMCs) take appropriate decision on pricing of petrol and diesel.

Government has reduced Central  Excise  duty  by  Rs.  13/  litre  and  Rs.  16/  litre  on  petrol  and diesel respectively in two tranches in November 2021 and May 2022. The excise duty reductions were fully passed on to consumers and retail prices fell as a result. The measure was aimed to give  a  further  fillip  to  the  economy  and  to  boost  consumption  and  keep  inflation  low,  thus helping the poor  and middle classes. Subsequently, many States/UTs have also reduced VAT rates on petrol and diesel.

Prices  of  LPG  in  the  country  are  linked  to  its  price  in  the  international  market.  However, Government  continues  to  modulate  the  effective  price  to  consumer  for  Domestic  LPG.  The subsidy, as admissible, is credited to the bank accounts of eligible beneficiaries. Till December 2022, 9.6 Crore PMUY connections have been provided to poor households in the country. In addition, Government has started a targeted subsidy of Rs. 200 per 14.2 Kg cylinder for Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries for upto 12 refills a year for years 2022-23 and 2023-24.

During the period 2020-21 to 2022-23, the average Saudi CP (international benchmark for LPG pricing)  went  up  from  $415  per  MT  to  $712  per  MT.    However,  the  increase  in  international prices  was  not  fully  passed  on  in  retail  prices,  due  to  which  the  Oil  Marketing  Companies (OMCs) suffered under recoveries of approximately Rs. 28,000 crore on sale of domestic LPG. To compensate this, Government paid a one-time compensation of Rs. 22,000 crore to OMCs in FY 2022-23.  During Covid Pandemic, Government also provided about 14.17 Crore free LPG refills to PMUY households under Pradhan Mantri Gareeb Kalyan Package during 2020.

- (b): OMCs  procure  biodiesel  for  blending  with  diesel  as  per  BIS  standards.  Biodiesel procurement by OMCs has increased from 1.1 crore liters during 2015-16 to 11.57 crore liters during April-June 2023.
- (c): No such proposal is under consideration before the Government.  The prices of petrol and diesel vary from market to market due to various factors like freight rates, VAT, local levies etc.

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