Minister of State (Independent Charge) for Petroleum & Natural Gas Dharmendra Pradhan goes by Prime Minister Narendra Modi’s prescription of bitter medicine to revive the economy, but stresses the government will not change the current subsidy regime for kerosene and LPG. He says in this interview that the government’s emphasis is on finding out innovative ways to address the problem of subsidies.
It had been estimated that if the government continues to raise the diesel price by 50 paise a month, the under-recoveries could be offset by September-October and it could then stop these monthly hikes. Where does that stand now?
Let’s see. We are not changing the present practice. I don’t want to jump to conclusions. There will be no increase in the price of domestic cylinders or that of kerosene, nor will there be any change in the current practice in diesel prices. The petrol price is already market-linked.
How do you then plan to handle subsidies, especially on LPG cylinders and kerosene?
We have to find some way. An increase in price is not the only answer. There could be target-based customers; there could be technology synergy. There is DBT [direct benefits transfer] also. It may be a small gesture but some PSU people, about 100 so far, have voluntarily given up subsidy [on LPG cylinders]. We will work with cooperation of the states regarding kerosene.
There was talk earlier of linking subsidies with income.
Let’s create a public debate. We can start with a positive model as shown by these PSU people. I haven’t forced them; there was no fatwa. I have congratulated them. There are 15 crore customers in the LPG sector. If people want to give up subsidies, they have to tell their respective dealers… and the dealers will inform the oil marketing company. Our prime minister’s idea is to look for innovative ways of subsidy management. Technology can also help in scrutinising the customer base to check duplication. Targeting is also a way. It’s just 40 days [of the government]. We have two challenges before the ministry — to reduce the import bill and to reduce the subsidy burden.
Despite a significant expansion in LPG connections and electrification across the country, why has kerosene offtake not seen any corresponding decline?
The central government’s role is to deliver kerosene and states have to distribute it. Every year, kerosene allotment is reducing but in a very miniscule way. As the amount of LPG connectivity increases, on a pro rata basis, kerosene allotment should decrease. Can we find some other way at some stage? We are investing in electricity, but there is no power in households. Power generation, grid supply, are the grey areas. I know there is huge pilferage of kerosene… but why deprive poor people? We have to take states into confidence to see how to reduce the burden [of kerosene …continued »