• Users of 24 Pahal cylinders up 260%, diversion likely

    An audit scrutiny has revealed a significant jump in consumers using more than 24 LPG cylinders a year following the introduction of direct benefit transfer (DBTL) for cooking gas, leading the federal auditor to suspect diversion of non-subsidised cylinders for commercial use.

    The national average consumption of domestic LPG cylinders is 6.27 a year.However, after the implementation of `Pahal’ or the DBTL scheme, the number of domestic consumers exhausting more than 24 LPG cylinders in first seven months of 2015-16 increased by 260% compared to the total offtake of non-subsidised cylinders in 2014-15.

    The whole of 2014-15 saw 3,070 domestic consumers availing more than 24 cylinders. But just the seven months between April and October of 2015-16, saw 8,023 domestic consumers use more than 24 cylinders.

    The comptroller and auditor general (CAG), which has carried out scrutiny of 12 crore LPG consumers, has asked the government to check the possibility of “diversion of non-subsidised domestic LPG for commercial use”. The price dif ferential between non-subsidised cylinder and commercial cylinder is Rs 233 per cylinder. It has observerd the risk of diversion is highest in cylinders distributed by Indian Oil.

    The government introduced the DBTL scheme in November 2014. The scheme involves 16.17 crore LPG consumers serviced by 16,781 LPG distributers by three oil marketing companies–Indian Oil, Hindustan Petroleum and Bharat Petroleum.

    A domestic consumer is entitled to receive subsidy on 12 cylinders per annum under the DBTL scheme.Any excess consumption would result in payment of the market price. “The number of domestic consumers consuming more than 24 LPG cylinders during the first seven months of 2015-16 (April to October 2015) exceeded the corre sponding numbers for the entire year of 2014-15 by 261%,” the CAG said.

    The federal auditor highlighted the risk associated with higher consumption of domestic non-subsidised LPG cylinders since there is a significant price difference between the price of commercial and domestic non-subsidised LPG on account of additional duties and levies. The duty differential on an equivalent 14.2 kg LPG cylinder would cost Rs 233.20 higher for the non-subsidised cylinder compared to commercial LPG cylinder.

    The number of domestic consumers consuming more than 24 cylinders in the first seven months of 2015-16 was 2.6 times that of the entire year of 2014-15. “There has been a sharp increase in offtake of domestic LPG cylinders not entitled to receive subsidy , which increases the risk of diversion,” the auditor observed. Da’Ron Payne Jersey

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