Lok Sabha Question No. 224 (STARRED), answered on 2016-03-14
Subject: Subsidy on LPG
Ministry: PETROLEUM AND NATURAL GAS
Asked by: R. VANAROJA

## LOK SABHA

## STARRED QUESTION NO. 224 TO BE ANSWERED ON 14 TH  MARCH, 2016

## SUBSIDY ON LPG

## *224.  SHRIMATI VANAROJA R.:

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

- (a) the amount of subsidy burden incurred on LPG, Kerosene and other petroleum products by upstream companies during the last three years and the current year;
- (b) whether the Oil and Natural Gas Corporation Limited and Oil India Limited have urged the Government to shift the subsidy burden on LPG and Kerosene from upstream companies to downstream companies so as to maintain their margin level;
- (c) if so, the details thereof along with the mechanism evolved by the Government;
- (d)  whether  the  Government  has  effected  any  changes  in  the  subsidy  sharing  formula amongst the upstream and downstream companies; and
- (e) if so, the details thereof along with the steps taken by the Government to rationalise the subsidy burden including bearing partly by the Oil Marketing Companies?

## ANSWER

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MINISTER OF STATE (I/C) IN THE MINISTRY OF PETROLEUM AND NATURAL GAS \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_(SHRI DHARMENDRA PRADHAN)   \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

- (a) to (e):   A statement is laid on the Table of the House.

## Statement referred to in reply to parts (a) to (e) of the Lok Sabha Starred Question No. 224  asked  by  Shrimati  Vanaroja  R.  to  be  answered  on  14 th March,  2016  regarding 'Subsidy on LPG'.

- (a): The details of under-recovery shared by the Public Sector upstream Oil Companies since 2012-13 are as under:

(Rs. Crore)

|                                    |   2012-13 |   2013-14 |   2014-15 |   2015-16 (April-December, 2015) |
|------------------------------------|-----------|-----------|-----------|----------------------------------|
| Discount by the upstream companies |     60000 |     67021 |     42822 |                             1980 |

- (b): The Public Sector upstream Oil Companies, namely Oil and Natural Gas Corporation (ONGC) & Oil India Limited (OIL) have requested the Government to review the subsidy sharing mechanism and exempt them from sharing of subsidy.
- (c)  to  (e):  Under  the  burden  sharing  mechanism,  under-recoveries  incurred  on  the  sale  of sensitive  petroleum  products i.e. Petrol (upto 25.06.2010), Diesel (upto 18.10.2014), Subsidized Domestic LPG and PDS Kerosene were being shared by all stakeholders in the following manner:-
- (i) Government through cash assistance;
- (ii) Public Sector Oil Companies namely, ONGC/OIL and GAIL (India) Limited (GAIL) by way of price discount on crude oil and products.
- (iii) Public  Sector  Oil  Marketing  Companies,  by  absorbing  a  part  of  the  underrecoveries.

Till 2014-15, burden sharing was finalized every quarter taking into consideration the quantum  of  under-recoveries  incurred  to  OMCs.    In  the  current  financial  year  2015-16, Government has decided to provide a fixed fiscal subsidy of Rs.18 per kg under the Direct Benefit Transfer for Domestic LPG during April - October, 2015 and Rs.15 per kg for the period November, 2015 onwards. This, at present, covers the entire burden of DBTL subsidy on  Domestic  LPG  and  no  sharing  of  subsidy  is  being  done  by  the  Public  Sector  Oil Companies.  Government has also approved budgetary support for sharing the under-recovery on PDS Kerosene for current financial year @ Rs.12/ Litre and the balance under-recovery would be borne by the Public Sector Oil Companies.

However, in view of the request of Public Sector upstream Oil Companies for relief from sharing the under-recovery of OMCs; they have been exempted from sharing of underrecoveries of OMCs in Q3 of the current financial year and the remaining under-recovery on sale of PDS Kerosene for Q3 will be borne by Public Sector OMCs.