Mopng PPT 14 09 2017

14-09-2017
Review of Reform measures taken in

Kerosene and LPG
Ministry of Petroleum and Natural Gas

Ministry of Petroleum and Natural Gas 14-09-2017
Annual Kerosene Allocation (at National Level)

Subsidy on Kerosene at a Glance
Subsidy on PDS Kerosene

Subsidy Subsidy
Year
Outgo (In Cr) Per Litre (In Rs)
2012-13 30,156 31.98
2013-14 31,255 34.8
2014-15 24,804 28.75
2015-16 11,496 13.47
2016-17 8,455 11.39

Subsidy on Kerosene at a Glance
Subsidy on PDS Kerosene (contd.)
• Fortnightly Increase in Price @ 25 Paise

per Litre w.e.f 01.7.2016 till date
• Total reduction in subsidy so far by Rs.

5.98/ litre.
• Current SKO Subsidy w.e.f. 01 Sept 2017 is

Rs. 7.79/ litre
Direct Benefit Transfer in Kerosene
• DBTK launched in four districts of Jharkhand

with effect from 1st Oct, 2016
– Extended to seven more districts from 1st April,
2017
• Extended to entire State from 1st July, 2017
• Impact: Initial assessment of four districts
shows a 30-40% reduction in off-take for fair
price shops in four districts
Cash Incentive - Voluntary Cut undertaken in allocation

Four states have opted for voluntary cuts - Karnataka, Haryana, Telangana
and Nagaland
S No Name of the Voluntary cut Total applicable
state undertaken (KL) cash incentive in
FY-2016-17
(Rs in Crores)
1 Karnataka 1,90,324.00 171.87
2 Haryana 12,094.40 7.21
3 Telangana 14,796.00 12.25
4 Nagaland 1,095.00 0.92
Total 2,18,309.40 192.25
Kerosene Free States / UT

Sr No State/UT Kerosene Free w.e.f
1 New Delhi 01.10.2012
2 Chandigarh 01.04.2016
3 Haryana 01.04.2017
4 Punjab 01.01.2017
5 Daman & Diu 01.06.2017
6 Dadar & Nagar Haveli 01.07.2017
7 Andhra Pradesh 01.08.2017
8 Puduchery 01.10.2017
9 Andaman except Nicobar 31.12.2017
10 Goa 01.11.2017
States committed for DBTK in 2016 but yet to start

Sr. No State Districts
1 Rajasthan Pali, Jhunjhunu, Kota
2 Gujarat Bansakantha, Chota Udaipur, Ahmedabad
Rural, Bharuch, Dangs, Porbandar,
Devbhumi Dwarka
3 Himachal Shimla, Solan, Una
Pradesh
4 Chhattisgarh Raipur, Durg, Bilaspur
5 Madhya Hosangabad, Harda, Khandwa,
Pradesh Burhanpur
6 Maharashtra Amravati, Latur
Summary of Major Initiatives
• Impact of Price Increase from 1st July, 2016 till 31st Aug,
2017 on Subsidy is in the range of Rs. 1900 crore
• Kerosene Allocation reduced by 40% in current year

from FY 2015-16 levels
• Subsidy Budget in FY 2017-18 likely to be Rs. 4000 Cr.

(at current levels)
• Cash Incentive Scheme for States for kerosene subsidy

PAHAL - प्रत्यक्ष हस्तां तरण लतभ (Direct Benefit Transfer in LPG)
Recommendation of EMC on Kerosene

• States wise allocation of PDS Kerosene may be aligned with per
capita consumption of PDS Kerosene reported by NSS over a
period of two years.
• Savings in subsidy may be shared with State Government to
incentivise them to promote green and clean fuels.
• To introduce Direct Benefit Transfer for kerosene on PDS
Kerosene.
• As the beneficiaries obtain either an electricity connection or LPG
connection, a 25% reduction in the monthly quota of PDS
kerosene may be imposed. As beneficiary procures both, his/her
name may be deleted from the list
NEXT STEPS
Suggestions for reducing the PDS Kerosene burden on GOI
• Continue with reduction in allocation to States.

• Continue to increase the price of subsidized
kerosene.
• Market price of non-subsidized kerosene is
lower than market price of diesel.
• Rs. 30 vs. Rs. 60
• Incentive for diversion remains.
LPG Subsidy Regime
12
Indian LPG Scenario At A Glance
Total No. of Consumers 21.33 Cr
22 MMT
- Out of which roughly 50% is
LPG Consumption imported
- 90% of consumption is in
domestic sector
No. of consumers receiving
18.82 Cr
subsidy
135 Cr
No. of refills every year
[35-40 Lakh refills everyday]
Impact of DBT in LPG

1. 18.82 Crore receiving subsidy through PAHAL gateway
2. Removal of approx. 3.66 Crore duplicate/ ghost/ fake

connections
3. Efficient and transparent mechanism for subsidy transfer

(failure rate of transactions is 0.18%)
4. Increase in LPG coverage from 55% in Apr-2014 to 76% in Aug-

2017
5. Provision of better and improved Consumer centric LPG

services
Pradhan Mantri Ujjwala Yojana (PMUY)
Ujjwala At A Glance
• 5 Cr LPG connections to be provided to BPL families with a
support of Rs.1,600 per connection in the next 3 years.
• PMUY was launched by Hon’ble Prime Minister on May 1st,
2016 in Ballia, UP.
• Current Status
• Number of States/UTs covered - 36
• Number of Districts covered - 709
• No. of Connections Issued - 2.92 Cr
• No. of Connections released to SC/ST - 44%
• Likely to cross 3 crore mark in 7-8 days
Access to Clean Cooking
New Connections issued

2014-15 - 1.63 Crore
2015-16 - 2.05 Crore
2016-17 - 3.32 Crore
2017-18 (till date) - 1.55 Crore
Total 8.55 crore
Subsidy on Domestic LPG

Subsidy Subsidy
Year
Outgo (In Cr) Per Cylinder (In Rs)
2012-13 41,565 449.72
2013-14 52,247 530.2
2014-15 40,569 392.3
2015-16 16,074 150.82
2016-17 14,566 108.78

Subsidy on Domestic LPG
• Effective price of subsidised Domestic LPG is

being increased by Rs 2/- per cylinder w.e.f.
July, 2016 and by Rs. 4/- per cylinder w.e.f.
01.06.2017
• Total price increase so far is Rs. 38/-
• Current Subsidy w.e.f. 01 Sept 2017 is Rs.

95.11 per cylinder
Recommendation of EMC on LPG

• Link modified DBTL Scheme to Aadhaar.
• Re-introduce cap on consumption of subsidized LPG cylinders to 6
• Encourage self exclusion of well-off customers
• Exclude well-off consumers based on transparent economic criteria. LPG

consumers list available with the OMCs may be verified with the digitised
list available with Income tax department to draw up exclusion list
• To generate greater awareness about subsidy salience by printing the full

price of the cylinder and subsidy on cash memo/cylinder
Reducing LPG Subsidy Burden - Options
• Continue the price increase @ Rs. 4/- per month
• Extending LPG subsidy only to BPL and Ujjwala consumers –

currently 4 Crore out of 19 Crore are BPL/ Ujjwala
• Capping the per cylinder subsidy (except for BPL and PMUY
connections) - the balance has to be borne by the consumers.
• Widening the basket of existing non-entitled consumers from

consumers earning more than Rs. 10 lakh to consumers having
taxable income – 50 Lakh people in 5 to 10 Lakh bracket
• Reducing subsidy entitlement for refills above the national

average consumer consumption of Eight [0-8 – full subsidy;
Above 8 – no subsidy or 50% subsidy].
Thank You
Impact of DBT in LPG - Subsidy Savings

Average Subsidy Estimated Savings on
Blocked Consumers
per Cylinder consumption of
Year (In Crores) (for that year) 12 cylinders per annum
(in Crores of Rupees)
2014-15 3.34 Rs. 369.72 14,818.40
2015-16 3.56 Rs. 150.82 6,443
3.53 4,608
Consumers who are taking Non-
2016-17 Subsidized domestic LPG:
2.74 Crore*
* This includes 1.04 Crore of Give
It Up Consumers Rs. 108.78 3,577
Total 29,446
Consumer Centric Initiatives by MoPNG

1. E-SV - “Sahaj”: Making it possible for consumers to get new LPG
connection online without visiting the distributor’s showroom.
2. Emergency Helpline No. ‘1906’: 24*7 operations for attending
emergency LPG leakage complaints.
3. Online Payment facility for Refills: Provision for consumers in making the
online payments through Net banking & Credit/Debit card.
4. Digilocker: Move towards paperless office. Subscription Vouchers (SVs)
and Transfer Vouchers (TVs) are made available from Digilocker.
5. Smart Delivery Management system: System promotes friendly mobile
application for delivery boys with features like smartcard based delivery
options, real time delivery confirmation and capturing of geographical
coordinates of delivery location.
6. The Unified online portal: www.mylpg.in is available in 13 languages, to
facilitate consumers to carry out activities like booking, tracking, DBTL
status, Distributors performance, porting the gas connection, receipt of
subsidy details etc.

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14-09-2017

Review of Reform measures taken in

Ministry of Petroleum and Natural Gas

Annual Kerosene Allocation (at National Level)

Subsidy on PDS Kerosene

2012-13 30,156 31.98

2013-14 31,255 34.8

2014-15 24,804 28.75

2015-16 11,496 13.47

2016-17 8,455 11.39

Subsidy on PDS Kerosene (contd.)

• Fortnightly Increase in Price @ 25 Paise

• Total reduction in subsidy so far by Rs.

• Current SKO Subsidy w.e.f. 01 Sept 2017 is

• DBTK launched in four districts of Jharkhand

Cash Incentive - Voluntary Cut undertaken in allocation

Kerosene Free States / UT

States committed for DBTK in 2016 but yet to start

• Kerosene Allocation reduced by 40% in current year

• Subsidy Budget in FY 2017-18 likely to be Rs. 4000 Cr.

• Cash Incentive Scheme for States for kerosene subsidy

Recommendation of EMC on Kerosene

Suggestions for reducing the PDS Kerosene burden on GOI

• Continue with reduction in allocation to States.

Indian LPG Scenario At A Glance

Total No. of Consumers 21.33 Cr

Impact of DBT in LPG

2. Removal of approx. 3.66 Crore duplicate/ ghost/ fake

3. Efficient and transparent mechanism for subsidy transfer

4. Increase in LPG coverage from 55% in Apr-2014 to 76% in Aug-

5. Provision of better and improved Consumer centric LPG

New Connections issued

Subsidy on Domestic LPG

2012-13 41,565 449.72

2013-14 52,247 530.2

2014-15 40,569 392.3

2015-16 16,074 150.82

2016-17 14,566 108.78

Subsidy on Domestic LPG

• Effective price of subsidised Domestic LPG is

• Total price increase so far is Rs. 38/-

• Current Subsidy w.e.f. 01 Sept 2017 is Rs.

Recommendation of EMC on LPG

• Re-introduce cap on consumption of subsidized LPG cylinders to 6

• Encourage self exclusion of well-off customers

• Exclude well-off consumers based on transparent economic criteria. LPG

• To generate greater awareness about subsidy salience by printing the full

Reducing LPG Subsidy Burden - Options

• Continue the price increase @ Rs. 4/- per month

• Extending LPG subsidy only to BPL and Ujjwala consumers –

• Widening the basket of existing non-entitled consumers from

• Reducing subsidy entitlement for refills above the national

Impact of DBT in LPG - Subsidy Savings

Consumer Centric Initiatives by MoPNG

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