Subsidies on cooking gas (LPG) and Kerosene will be restored first week of August, stated an official confirmation from the Prime Minister’s Office Monday.
This is in keeping with the People’s Democratic Party’s (PDP) pledge to reinstate the Government of India (GoI) subsidy within the party’s first month in office.
Right after he assumed office at the Gyalyong Tshogkhang on July 29, Prime Minister Tshering Tobgay met Indian Ambassador VP Haran and discussed the issue of subsidy withdrawal by the Indian Ministry of External Affairs (MEA) in July, besides a wide range of other issues.
“On behalf of the people and the Royal Government of Bhutan, Lyonchhen Tshering Tobgay requested Shri VP Haran to restore the subsidies which were removed earlier this month. Indian Ambassador informed and conveyed that the Government of India will restore all subsidies from the first week of August this year,” a news release from the Prime Minister’s Office stated.
Bhutanese consumers will now be able to purchase the products at prices that existed before July 1 when the subsidy was lifted. A LPG would cost Nu 504 and not Nu 1,196.
The Indian ambassador to Bhutan VP Haran earlier said the abrupt removal of the subsidy by the Indian Oil Corporation (IOC) effective from July 1 was due to a ‘miscommunication’ between the MEA and IOC.
IOC had earlier sent a letter to the Government of Bhutan on June 28 stating it would be removing the LPG and Kerosene subsidy based on the instructions of MEA.
“We were interested to find out how the subsidy element jumped from 33 crores in 2011 to 52 crores in 2012, which is a huge jump of 66 % when between 2010 and 2011 it jumped from only 32 crores to 33 crores. This got us worried. We had wanted IOC to check why it was happening. Instead, I think there was some miscommunication and IOC issued that letter and cut the subsidies,” the Indian ambassador said then.
The Ambassador has also dismissed news reports and rumors that the subsidy withdrawal was politically driven or in any ways linked to the state of Bhutan-India relations.
Lyonchhen conveyed his thanks to GoI on behalf of the Bhutanese people through the Indian Ambassador. In response to the Indian Government’s invitation, Lyonchhen also assured that he would make a visit to India at the earliest time possible.