To reflect global prices, the government has decided to end the subsidy on LPG gas supplied through gas cylinders. The subsidy would be completely eliminated by March 2018 and it would be achieved by raising the prices of gas cylinders by Rs 4 per month. This will ensure that people do not have to suffer an immediate financial hardship. Hike of Rs 4 every month would be okay with most households and it will allow them time to adjust to the new system that would see the end of LPG subsides by March 2018. It may be recalled that the government had earlier asked all the public sector oil companies to hike their rates by Rs 2 per month for the 14.2-kg cylinder. However, now the hike would be double of that, i.e. Rs 4 per month.
Since the Rs 2 per month hike was put in place, the public sector oil companies have hiked rates on 10 occasions. Now, Rs 4 will be hiked every month and this will continue till March 2018. The cumulative hike will automatically bring the LPG prices to market rates, which will effectively end the era of LPG subsidies. As of now, more than 18 crore customers use subsidized LPG gas. Non-subsidized LPG gas users are currently 2.66 crore.