Kerosene Subsidy

Amid the continuing economic crisis, Sri Lanka's state-owned fuel distributor Ceylon Petroleum Corporation (CPC) has hiked the price of kerosene to cut losses

The Centre's push to phase out kerosene is a work in progress, a decade after the move towards rationalising the allocation of the fuel to states. Read more in today's top headlines

For now, most states still seek kerosene allocations

The fuel sold through the public distribution system (PDS) is now priced at market rates.

Analysts say the subsidy burden on both LPG and kerosene is likely to be around Rs 35,000 crore

For 2019-20, the Centre had estimated average crude price of $55 a barrel, and for 2020-21, it has been assumed at $50 a barrel.

On a monthly basis, the government has been increasing the price of subsidised kerosene by 25 paise to phase out the subsidy

The rise in subsidy burden on LPG was because of an increase in consumption and a rise in international prices during the period

The government, say officials, hopes to end the subsidy on kerosene by 2020. "We expect at least 95 per cent penetration (into households) of liquefied petroleum gas through the Pradhan Mantri Ujjwala Yojana (PMUY, on cooking gas connections to the poor) and also 100 per cent electrification (pushed by the Saubhagya scheme) to be a reality by 2020. With the consumption of kerosene declining on a daily basis, the aim is to do away with the subsidy by then," said an official. While there could be an increase in the subsidy on LPG (cooking gas), analysts said there would not be much net increase. For the first six months of the financial year (April-September), the cumulative subsidy claims on LPG and kerosene to the petroleum ministry stood at Rs 9,079 crore. This will rise with the recent increase in global oil prices.Kerosene subsidy is expected to decline by 40 per cent from Rs 7,595 crore in 2016-17, to Rs 4,500 crore this financial year.According to the ministry's Petroleum ...

With an aim to take PDS kerosene to the targeted beneficiary, it has been decided to implement DBTK in 2016-17.