In India, Government provides subsidy. Discuss the impact of such subsidy on (i) Consumer Equilibrium if subsidy is given on LPG Cylinder and (ii) on Producer Equilibrium if given in SEZs.
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Cooking gas (LPG) subsidy has jumped by over 60 per cent in last two months as the government maintains price line despite rising international rates, Indian Oil Corp (IOC) Chairman Sanjiv Singh said.
Cooking gas (LPG) subsidy has jumped by over 60 per cent in last two months as the government maintains price line despite rising international rates, Indian Oil Corp (IOC) Chairman Sanjiv Singh said.All LPG consumers have to buy fuel at market price. The government, however, subsidises 12 cylinders of 14.2-kg each per households in a year by providing the subsidy amount directly in bank accounts of users.
"Subsidy amount (transferred in bank accounts) was Rs 159.29 per cylinder in May and it was raised to Rs 204.95 in June and to Rs 257.74 per cylinder this month," he said.
The higher subsidy was meant to keep rates of subsidised LPG in check, Singh added.
International rates of LPG, which was used as a benchmark for pricing of domestic fuel, have been on the run since June. Non-subsidised or market priced LPG price was Rs 653.50 per 14.2-kg bottle in the national capital in May, which rose to Rs 698.50 (Rs 48 pr cylinder) in June.
International rates of LPG, which was used as a benchmark for pricing of domestic fuel, have been on the run since June. Non-subsidised or market priced LPG price was Rs 653.50 per 14.2-kg bottle in the national capital in May, which rose to Rs 698.50 (Rs 48 pr cylinder) in June.This month price has further risen by Rs 55.50 to Rs 754 in Delhi.