North-east may get up to ₹1,000 crore as gas subsidy
NEW DELHI : The Centre may allocate around ₹800-1,000 crore as subsidy on the sale of natural gas under the administered price mechanism (APM) in North-eastern states for FY25, said two people in the know of the development. The ministry of petroleum and natural gas is likely to propose to the finance ministry to allocate the amount in the upcoming Union budget. The allocation which will be made under the head of “other subsidy payable including for North Eastern Region", if approved, would lower than ₹1,633.02 crore outlay announced in the previous budget (for FY24).
The allocation had been increased from ₹811 crore in FY23. “Allocation for APM gas sale in the North-east for supporting the growth of PNG (piped natural gas) may be about ₹800-1,000 crore. This will be among the proposals to be made for the budget by the (petroleum) ministry," said one of the two people mentioned above.
Queries sent to the ministries of petroleum and natural gas, and finance remained unanswered at press time. Launched in FY11, the scheme covers the sale of APM gas to customers in the North-eastern region by state-run oil and gas companies, ONGC and Oil India. Customers pay a subsidized price for the gas, currently around 60% of the APM price as notified by the government.
The subsidized amount is later claimed by oil and gas companies on a monthly basis. Customers of APM gas include city gas distribution players, PNG operators, fertilizer companies and gas-based power generators. The Centre has been encouraging the use of natural gas, considered cleaner fuel than oil and other fossil fuels.
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