‘Chidambaram, Moily did not meet over LPG subsidy’


New Delhi : The union finance ministry Friday clarified that there was no meeting between Finance Minister P. Chidambaram and Petroleum Minister M. Veerappa Moily on raising the cooking gas cylinder subsidy cap.

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The ministry was reacting to newspaper reports that Chidambaram and Moily had met to discuss the oil ministry’s readiness to raise the household subsidy limit of six liquefied petroleum gas (LPG) cylinders to nine per family per year.

The ministry said: “Some newspapers have reported that there was a meeting between Finance Minister P. Chidambaram and Minister of Petroleum and Natural Gas M. Veerappa Moily yesterday (Thursday) on subsidy for LPG cylinders. It is clarified that no such meeting took place either yesterday or in the recent past.”

News reports said that the oil ministry had asked the finance ministry for Rs.3,000 crore as subsidy towards raising the cap on LPG cylinders during Moily’s “meeting” with Chidambaram and the heads of state-run oil companies.

Moily told parliament Friday that he would discuss increasing the LPG subsidy with the prime minister and the finance minister.

“We are applying our minds to it. I will discuss with the prime minister and the finance minister by how much to increase (raise the cap),” Moily told the Lok Sabha during question hour.

According to the minister, even with the cap of six subsidised LPG cylinders per household per year, the government had a subsidy burden of Rs.36,000 crore each year on its oil import bill. The total oil subsidy was around Rs.1.64 lakh crore.

A subsidised LPG cylinder containing 14.2 kg liquefied petroleum gas costs Rs.410.42 in New Delhi, while it costs the government Rs.921.

Government sources said a decision on revising the cap could not be taken until Dec 17, when the second phase of Gujarat assembly polls ends.