Kerosene subsidy eliminated through fortnightly price increases

The central government has eliminated the subsidy on kerosene through small fortnightly price increases over nearly four years amidst low oil prices, enabling savings for the government at a time when it is facing a revenue shortfall. This has raised expectations with respect to the elimination of the cooking gas subsidy, which is also being cut gradually. The government instructed state-run oil companies this month to price kerosene at market rates after regular price revisions obviated the need for a subsidy for kerosene sold through the public distribution system. The recent oil price collapse is expected to sharply cut the cooking gas subsidy.