Minister of Petroleum & Natural Gas, M Veerappa Moily formally launched the direct benefit transfer for LPG (DBTL) Scheme today at Tumkur
Oil companies have raised diesel price by 50 paise per litre and petrol by 75 paise per litre from Saturday because of rising international oil prices and unfavourable exchange rates.
Domestic production can only meet less than one-third of the biofuel requirement of oil companies.
State oil marketing companies sell diesel, kerosene and cooking gas at government-determined prices, which is often below market rates.
A separate ministerial panel will meet later to consider new gas pricing formula prescribed by PMEAC, which proposes to double the price.
The government will directly transfer money directly to bank accounts of cooking gas customers in 10 districts from June 1 before launching it nation-wide to check diversion of highly subsidized fuel and eventually save about 10,000 crore annually.
State-run oil firms, preparing for fierce competition from private players like Reliance Industries, Essar Oil and Shell.
State-run oil firms have urged the oil ministry to grant them freedom to spend heavily in setting up new petrol pumps.
Gail India is struggling to find buyers for the gas it plans to bring from the US, because of the uncertain investment climate.
The Re 1 hike accounts for two months as companies had skipped raising the fuel price by 50 paise previous month because of political considerations.
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