As we all know the government of India has decided to hike the price of subsidised LPG cylinders by Rs 4 every month. From September 2016 to March 2017, the price had increased 6 times, in February (Rs 66.5) and the highest ever in history was in March (Rs 86). The two things we all should know:
1. International Oil Prices
From 2014, the international crude oil price/barrel in USD fall regularly. It is less than half from the time this government (NDA) took charge. Moreover, the most important thing Rupee is more stable against USD.
2. September 3, 2015
This date was very important because Petroleum & Natural Gas Regulatory Board issued a public notice in which they asked all the Oil PSUs to open their existing pipeline network as a common carrier which will enable private operators to use them.
According to the Janta Ka Reporter, Essar oil and Reliance could save billions of Rupees from this step as they can carry their products from Oil PSUs pipelines to distant parts of the country.
But in October 2015, Indian Oil Corporation (IOC) opposed the move of the Petroleum & Natural Gas Regulatory Board. They stated that this will create supply issues for them.
“Give it Up” Campaign
On 27 March 2015, PM Modi launched “Give it Up” campaign asking people to give up subsidy on cooking gas.
The Hindu reported that the Reliance Industries had sought permission to use the India’s longest LPG pipeline that Indian Oil Corp (IOC) is laying from Gujarat to Gorakhpur in eastern Uttar Pradesh.
In August 2014 the ministry allowed RIL (through its subsidiary LPG Infrastructure India Ltd) to sell 10000 tonnes per month to parallel marketers.
RIL endeavoured into domestic LPG retailing by launching a pilot project in four districts with 5 kg cylinders in October 2016. But they are not eligible to get government subsidy as they were a private player.
But a masterstroke came in June 2016 when the Modi government decided to abolish subsidy gradually on LPG.
Combining All The Data
- PM Modi asked to give up LPG subsidy.
- NDA Government allowed Reliance to venture into domestic LPG market and RIL started a pilot project.
- RIL approached to PNGRB to allow the access IOC gas pipeline.
- The government decided to withdraw complete subsidy on LPG.