Soon, the piped gas coming to your home might get cheaper if government approves a proposal by NITI Aayog. The apex think tank seems to be of the view that LPG subsidy needs to be broadened to include piped natural gas (PNG) subsidy as well under an umbrella term called 'cooking subsidy'. Currently, consumers of piped gas do not get any subsidy.
Some people believe that one of the reasons for slower adoption of PNG in urban India is because of this differentiation caused by subsidy. For LPG consumers, government subsidises 12 cylinders in a year by directly transferring the subsidy amount into beneficiary's account. While a subsidised cylinder costs around Rs 495 in Delhi, a non-subsidised one costs Rs 781. Oil firms revise LPG price on 1st of every month based on average benchmark rate and foreign exchange rate in the previous month.
For the last two months, government's LPG subsidy bill has gone up by more than 60 per cent because of an increase in LPG prices internationally. LPG subsidies have cost the government Rs 22,000 crore in 2016-17. The government had actually planned to cut subsidies by Rs 4 per month starting June 2017 and phase it out completely by 2018, however, the plan was later shelved.
After Prime Minister Narendra Modi asked citizens to voluntarily give up susbidies, more than a crore citizens have done so and the number is increasing.
Nearly 80 per cent of Indian households now have access to clean cooking gas, a big jump from 56 per cent three years ago.