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Administered prices for subsidized domestic fuels have risen sharply, with a 65% increase in kerosene and 17% over the last two years, but the subsidy on both products, which the government has attempted to reduce with steady price increases, also sharply increased due to soaring oil prices.
Kerosene, a cooking and lighting fuel that poor rural people buy from the public grid, rose to Rs 25.03 per liter on June 1 in Mumbai from Rs 15.02 per liter on July 1st, 2016, every 25 days.
However, the under-valuation or discounting of market prices on subsidized fuel increased by 54% to 18 Rs per liter, compared with 11.7 Rs per liter in the last two years due to the rise in fuel prices. oil. In the same period, the price of subsidized cooking gas increased by 72.39 Rs per cylinder, or about 17%. On June 1, the price of a 14 kg cylinder was 493.55 rupees. The subsidy on cooking gas increased by 59% to Rs 205 per bottle of Rs 129.
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<p> The government controls the price of cooking gas and kerosene, but has released the sale of all other petroleum products over the years. The government wants households to switch from polluting kerosene to cleaner cooking gas and electricity. He has expanded the kitchen gas consumer base at a record pace over the last three years and hopes to bring grid electricity to every home quickly. The subsidized kerosene allocation to states has been reduced from 42% in two years to 50 lakh kiloliters in 2017-2018.
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<p> But in many parts of the country, the rural poor are still dependent on kerosene because the electricity supply is erratic and the cooking gas is not so affordable. Gasoline and diesel, the two major transportation fuels whose rates are no longer controlled by the government, have experienced much lower rate increases compared to kerosene, although the international oil rates to which they are linked increased. Local gasoline rates increased by 20% and diesel rates by 26.5% in two years.
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<p> State-owned companies began increasing rates for subsidized kerosene by 25 percent. 100 per fortnight and those of cooking gas per month of 2 rupees in July 2016 as part of the government's efforts to eliminate fuel subsidies already deregulated. gasoline and diesel and a drop in the price of oil. After rising prices for diesel and gasoline sparked a public outcry last October, the central government cut prices for both fuels by 2 rupees per liter by cutting taxes. Around the same time, the government also asked the oil companies to pause the increases in cooking gas and kerosene rates to avoid any public reaction.
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<p> The break in the kitchen gas continued but kerosene rises resumed from January. A sharp reduction in supply and the reduction in oil prices have reduced kerosene subsidies from 24,800 crores in 2014-2015 to 4,672 crores in 2017-2018.<br />
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