In what can be described as the first major pinch of the Budget, prices of cooking gas are likely to go up by around Rs 25 per cylinder. However, the price of PDS kerosene is unlikely to be hiked by the government.According to sources, the petroleum minister has already prepared a proposal for a hike of about Rs 25 per cylinder in the price of LPG and the proposal is likely to be put forward to the Prime Minister shortly.In fact, though the issue has not been listed in the Cabinet meeting scheduled for Tuesday, according to sources Petroleum Minister Ram Naik plans to bring up the issue for discussion in the meeting. Talking to reporters, Naik said “till now there is nothing on petroleum listed for the meeting but some issues which are not listed do come up for discussions in the cabinet meeting”. He refused to give any further details on the possible hike.The petroleum ministry was expecting some rationalisation and reduction in the excise duties on petro products in the wake of the hardening of the international prices of crude and had earlier told the oil companies to hold back any revision before the Budget. Though the Budget shows a 40 per cent increase in subsidy outgo on kerosene and domestic LPG, the Rs 6,300 crore provision for 2003-04 includes undisbursed subsidy element of Rs 2,198 crore for the year 2002-03. Subsidy on LPG has gone down from Rs 67.75 (for 2002-03) to Rs 46 per cylinder while that for kerosene has fallen to Rs 1.64 per litre for the next fiscal from Rs 2.45 per litre, sources added.The subsidy cut implies raising kerosene prices by close to a rupee but given the nature of the politically sensitive commodity, its prices may not be increased. State oil marketing companies had lost around Rs 2,000 crore during April-May 2002 for selling petro products below the cost of crude and even though Naik had assured that they would be compensated through issue of government bonds, the Budget did not see any announcement to that effect.Petroleum ministry is also of the opinion that though the total subsidy outgo on petro products (including LPG, kerosene) is to the tune of Rs 8,116 crore in 2003-04, the surcharge of petrol would give the government Rs 6,846 crore and on top of that excise on LPG and kerosene would together account for Rs 5,275 crore. Considering, that the government had in the last Budget hiked the excise on these products from 8 per cent to 16 per cent, the additional excise would be half of Rs 5,275 crore. This clubbed with the surcharge would more than cover the total subsidy outgo for petro products. Hence, there is no net outgo from the exchequer, officials in petroleum ministry added.
