As the decision of government of India came to phase out the subsidy on LPG and kerosene oil, a long queue of LPG cylinders snaked out in the LPG depot in Motithang, yesterday. Bhutan has been enjoying the subsidy on these essential commodities allowed by the GoI for a long time.
The government of India decided to withdraw the subsidy on LPG cylinders given to the class 1 government officials, members of parliament, state legislative assemblies in the first phase, according to NDTV. This decision is to impact Bhutanese LPG consumers and the price of LPG and kerosene is already soared to triple figure of current price. With the withdrawal of government subsidy, a 19kg LPG cylinder will cost Rs.1200.
In Bhutan, the price of a LPG cylinder vary from place to place. As the new price come into effect, refilling a cylinder in Phuentsholing will cost Nu 1145, while in Thimphu it is 1196. In Bumthang the price will be the highest, Nu 1203, but in Samdrupjonghkhar the price is relatively lower, amounting to Nu 1070. The overall increase of the cooking fuel ranges from 612 to 693 Ngultrums throughout the country.
The interim government of Bhutan is seeking the intervention of external affairs ministry for taking up the matter with Indian government to reconsider the withdrawal of subsidy. “We have requested the external affairs ministry to intervene, considering the impact it will have on the consumers in Bhutan, and to continue to subsidize these products in view of the existing friendly relations between the two countries”, said Tshewang Rinzin, the adviser to economic affairs ministry.
According to the NDTV, such cutback of the subsidy will ease out the burden on India Government and save Rs 5,000 crore. The government subsidy on LPG estimated for the 2011-12 was Rs 25000 crore.
The urban poor or low income urban families in Bhutan will have to bear the brunt of price hike, which is more than 100%.