(ET)
A rather stable phase of oil prices is expected to help the government make big cuts in the oil subsidy allocation in next year’s budget. Sources said that the maths being worked out by the Finance Ministry ahead of the presentation of Budget 2021-22 in February next year could see petroleum subsidy burden falling by more than half from the FY21 levels of Rs 40,915 crore.
A major saving on the subsidy is expected to come from reduced government support for domestic LPG cylinders. A favourable global oil market, in the first half of current fiscal, helped the government to completely eliminate the subsidy paid under direct benefit transfer (DBT) to eligible domestic consumers from September this year.
