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Measures to ease burden on Domestic LPG/ PDS Kerosene Consumers

New Delhi,The Public Sector Oil Marketing Companies (OMCs) incur certain State Specific Costs (SSC) due to levies such as Entry Tax, Octroi, input tax restrictions on VAT which become irrecoverable levy for OMCs. 

In order to ensure that revenue demands of certain Indian states don’t become a burden for consumers across the country, the Government had introduced the scheme of State Specific Costs on 24th July 2012 to recover such irrecoverable levies from the consumers of the state/municipal area levying such taxes. 

In accordance with the Scheme, the OMCs were carrying out quarterly revisions in the Retail Selling Price (RSP) of the sensitive petroleum products including PDS Kerosene and Domestic LPG in respect of 12 states where such State Specific Taxes were being incurred. The latest revision in these States was due in July 2014. 

These revisions would have entailed an increase in the RSP of Domestic LPG in certain states viz. Kerala: Rs 4.50 per cylinder; Karnataka: Rs. 3.00 per cylinder; Madhya Pradesh: Rs. 5.50 per cylinder and Uttar Pradesh: Rs. 1 per cylinder; along with reduction in some states viz. Assam: Rs. 9.50 per cylinder; Bihar: Rs. 1.50 per cylinder and Maharashtra: Rs. 3.00 per cylinder. 

The SSC Scheme would have also meant a downward revision in RSP of PDS Kerosene ranging from Rs. 0.11 per litre in Maharashtra to Rs. 1.32 per litre in Navi Mumbai and a small increase of 2 paisa and 8 paisa in Haryana and Uttar Pradesh respectively. 

The Government has the interest of consumers utmost in its mind and has therefore decided to insulate the consumers from the impact of any increase in the Retail Selling Price of Domestic LPG and PDS Kerosene due to revision of SSC. It has therefore been decided that that the revision of Retail Selling Price of Domestic LPG and PDS Kerosene to those consumers on account of upward revision of SSC on Domestic LPG and PDS Kerosene would be deferred till the discussions on the State Specific Cost Scheme are completed with the State Governments. However, in the interest of consumers, the benefit of reduction in Domestic LPG and PDS Kerosene RSP in the states, where applicable, would remain in force till the review of SSC scheme is carried out by the Government.