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The government’s push for renewable energy has been one of its main defence against criticism for using fossil fuels. However, government subsidies to the renewable sector have fallen by nearly 45% since their peak in (financial year) 2017, according to a latest study, which states that support for the sector needs a revival. The study, “Mapping India’s Energy Subsidies 2021: Time for renewed support to clean energy”, by the International Institute for Sustainable Development and the Council on Energy.
The government has eliminated subsidies on poor man's fuel kerosene through small fortnightly price increases and the fuel sold through the public distribution system (PDS) is now priced at market rates. The Union Budget for 2021-22 makes no provision for payment of subsidy on kerosene in the fiscal year beginning April.
The Government of India is looking to sell LPG blended with methanol. This move can result in reduction of cooking gas subsidy by almost a third at current prices. Many countries mix 20% methanol with LPG. If implemented in India, the cost of cooking gas for household consumption is expected to go down by Rs 100 a cylinder. India’s policy think tank, Niti Aayog is likely to pilot the project.
Ahead of the first wave of US sanctions that will unwind today, Iran has cut a slack in foreign exchange rules. The Central Bank of Iran declared yesterday it will open currency markets, allowing exchange office to buy and sell hard currencies for trade. The bank will also subsidize exchange rates to enable people to purchase commodities and pharmaceuticals.
Moody’s Investors Service has stated that ONGC and OIL might have to share the fuel subsidy burden amidst elevating oil prices. These companies used to bear the fuel subsidy burden for around 13 years, until 2015. However, the report also indicated that subsidy sharing will be manageable for both the companies. ONGC and OIL will have to endure a shortfall of Rs 9,000-28,000 crore in subsidy, entirely, or in part.