The Petroleum Ministry has issued a rebuttal claiming its calculations were correct on the savings on account of direct benefit transfer in LPG cylinders tabled in Parliament.

A report by the Comptroller and Auditor General had questioned the method arrived at on the savings, more than 10 days ago.

The report, tabled on August 12, pointed out that 92 per cent of the subsidy savings were due to a fall in global oil prices and the Centre had overstated its savings estimate as it had assumed a uniform usage of 12 subsidised cylinders yearly per LPG user where the actual usage was an average of 6.27 cylinders.

The Centre defended its usage of 12 cylinders in its calculations saying fake, duplicate, or ghost connections were mostly used for diversion and it is safe to assume that these accounts would have used their full entitlement.

Fake accounts

The government also maintained that the savings were mostly due to the elimination of fake LPG accounts due to the implementation of PAHAL, the direct benefit transfer scheme for LPG subsidies. “For the financial year (FY) 2014-15, for 3.34 crore consumers outside the PAHAL net, the estimated savings would be 3.34 crore x 12 cylinders x Rs.369.72 (average Subsidy/cylinder for FY 2014-15) equal to Rs.14,818.4 crore,” the government clarification said. “Following a similar principle, the savings estimated for FY 2015-16 is Rs.6,443 crore and the total for both the years works out to Rs.21,261 crore.”

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