Govt eliminates subsidy on kerosene through small price hikes

The government has eliminated subsidy on poor man’s fuel kerosene through small fortnightly price increases and the fuel sold through the public distribution system (PDS) is now priced at market rates.

The Union Budget for 2021-22 makes no provision for payment of subsidy on kerosene in the fiscal year beginning April, according to budget documents tabled in Parliament.

In the current fiscal ending March 31, the kerosene subsidy was Rs 2,677.32 crore, down from Rs 4,058 crore in the previous financial year, the documents showed.

Industry sources said the government in 2016 allowed state-owned fuel retailers to raise the price of kerosene by 25 paise a litre every fortnight to cut the subsidy burden.