Once granted by the cabinet, household consumers and students will get a subsidy of either Rs 300 (based on the present pricing structure) on a cylinder of liquefied petroleum gas (LPG) or Rs 10 on a liter of kerosene. [break]
The subsidy on LPG will be limited to just one cylinder per family per month. Family relying on kerosene for cooking purpose will get a maximum of 10 liters per month as subsidy.
Likewise, the government will also provide five liters of kerosene at a subsidized rate to rural people for lightening purpose. It will also supply diesel at Rs 10 cheaper than that available at market prices to the farmers using pump sets to irrigate their lands.
“There are price ceilings on the volume of subsidized supply of diesel too,” said an MoCS official, adding that the package has already been endorsed at the ministerial-level and forwarded to the cabinet for approval.
Also, students who are permanent residents of Kathmandu or any other given city will not enjoy the state subsidy. It is exclusively targeted at migrant students.
In its proposal, MoCS has further stated that it would switch on to automatic pricing policy as soon as the package gets implemented. And for those consuming more than the allotted amount under the subsidized supply will have to pay competitive price.
Parting ways from the past, the government proposal says that the subsidy will be implemented as part of the government´s relief package and a separate fund will be allocated for the purpose.
If the cabinet endorses it, the Ministry of Finance might need to allocate Rs 3.5 billion as petroleum subsidy per annum.
NOC Chief Digambhar Jha, who pushed for the state subsidy instead of forcing NOC to do it, said the corporation is all set to implement the program within three months of the cabinet´s nod.
The package disclosed to Republica states that the government will fix the subsidized supply rate for LPG at Rs 1,200 per cylinder (of 14.2 kgs) and kerosene and diesel each at Rs 58.50 per liter.
However, the consumers will not get these products directly at the set rates. “They will need to pay open market prices and the government will refund the extra amount (between open rates and subsidized rate) through local bodies for general consumers and educational institutions for students,” said Jha.
MoCS proposal says it will issue cards to the eligible beneficiaries through NOC. Cards for general consumers will be distributed on the basis of voters´ database of Election Commission.
“We will rely on Universities´ enrollment records for issuing cards to the students,” said Jha. Nuclear families residing in rented homes away from their parents too can access such cards by producing employers´ letter.
Going by the proposal, the government will mobilize municipalities and ward offices as well as District Development Committees in the rural areas for the refund.
The consumers will need to submit bills and beneficiary card to claim the refund at the local bodies. Students will get the refund through university and colleges where they are enrolled.
The MoCS proposal, however, remains silent over possible leakage and misuse of such government subsidies as raised by experts. “We´ll carry out serious scrutiny while issuing cards,” said Jha, ruling out such speculations.
However, as past experiences suggest, experts do not rule out anomalies in NOC itself. “The staff themselves at the corporation will start selling cards. That happened in the past too and will surely take place in the future too,” said Umesh Dahal, NOC´s erstwhile deputy managing director.
Likewise, it lacks a mechanism to monitor that the subsidy actually reaches the targeted groups and do not end up as additional profit for dealers. “The price gap will open rooms for adulteration, but the proposal is silent on how NOC will deal with this,” added Dahal.
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