Press Information Bureau

Government of India

Ministry of Finance

24-April-2012 17:37 IST

Rs. 43,580 Crore Provided for Oil Subsidies in BE 2012-13

Provision of Rs. 43,580 crore has been made in BE 2012-13 for oil subsidies which include Rs.40,000 crore for compensation to Oil Companies for under recoveries on account of sale of petroleum products and Rs.3580 crore for Post APM Subsidies.

During the year 2011-12, an amount of Rs. 3481 crore has been paid by the Government under PDS Kerosene and Domestic LPG Subsidy (Rs.3000 crore), Freight Subsidity (for far flung areas) (Rs.23 crore) and subsidy to Oil Companies for supply of natural gas to North Eastern Region (Rs. 458 crore) for Post APM period. Further, Government has borne an amount of Rs.65000 crore which includes under recoveries of Rs. 20,000 crore of last quarter of the previous year, i.e. 2010-11.

Government has, in principle, agreed to make the prices of Diesel market determined. However, in order to insulate the common man from the impact of rise in international oil prices and the domestic inflationary conditions, the Government continues to modulate the Retail Selling Prices (RSP) of Diesel. There is no proposal at present to fully de-regulate cooking gas prices.

This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question in Rajya Sabha today.

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DSM/SS/Hb

Diesel price policy: market determination endorsed but RSP modulation retained to shield consumers from price shocks. Provision is made in the Budget Estimate to finance oil subsidies including compensation to oil companies for under recoveries and Post APM subsidies; payments have been made under PDS kerosene and domestic LPG subsidy, freight subsidy for remote areas, and subsidy for natural gas supply to the North Eastern Region. The Government supports market determination of diesel prices in principle but continues to modulate Retail Selling Prices of diesel to shield consumers, and has no present proposal to fully deregulate cooking gas prices.