New Delhi: The government on March 16 announced reduction in prices of cooking gas (LPG) by Rs 20 per cylinder from Rs 40 per cylinder hiked in the general Budget.

The reduced price would come into force from midnight, Petroleum Minister Ram Naik said in Lok Sabha.

The reduction in LPG price comes in the wake of representations made by political parties and consumer groups to reduce the burden on consumers.

Causing an embarrassment to government, National Democratic Alliance (NDA) allies Telugu Desam Party (TDP) and Janata Dal (United) JD (U) wanted total withdrawal of the hike in LPG as well as kerosene prices announced by Finance Minister Yashwant Sinha in his budget speech, amidst similar demand made by the Opposition.

TDP leader K Yerrannaidu said, "LPG and kerosene are used by poor people and we want maintenance of status quo in their prices."

JD (U) Devendra Prasad Yadav supported Naidu in his contention.

Naik told the House, "The government, after considering all aspects of the matter, have now decided to reduce the retail selling price of domestic LPG by Rs 20 per cylinder."

This would benefit over 6.3 crore urban and rural households, the Minister said.

As soon as Naik completed his statement, Opposition members including those from Congress, Left parties and Samajwadi Party made a strong demand for total rollback of the price hike of LPG and kerosene.

Parliamentary Affairs Minister Pramod Mahajan said those willing to speak on the issue could vent their views during the Budget debate.

Besides raising the price of LPG by Rs 40 per cylinder, Sinha had also announced increase in kerosene price by Rs 1.50 per litre. He had, however, reduced by 50 paise per litre the price of diesel and Rs 1 per litre of petrol. These changes in prices were given effect to by oil companies from March 1.

Maintaining that oil prices over the last few weeks have been showing an upward trend, Naik said the price of Brent crude, which was around $ 20 per barrel in the last week of February, was now over $ 23 per barrel.

The prices of petroleum products in the international market have also moved upwards over the past three weeks, he said, observing that despite the increase, the government decided to reduce the burden on consumers using LPG for cooking.

The subsidy burden due to this price reduction would increase by around Rs 700 crore during the year, he added.

PTI