IndianOil stopped supplying subsidised gas after govt communication
Ranchi   06-Jul-2013

India has withdrawn all subsidy on cooking gas and kerosene being provided to Bhutan arguably India’s only unquestioned friend among its neighbours creating a huge crisis in the tiny, landlocked kingdom and bringing bilateral ties under strain.

Since the step taken five days ago, gas and kerosene prices have more than doubled in Bhutan, and predictably, this will hit the poor the hardest. The head of the interim government, Sonam Tobgye, has written to external affairs minister Salman Khurshid. Government sources here confirmed that Bhutan embassy had sought an appointment with Khurshid to deliver the letter.

The subsidy cut has come against the backdrop of India smarting since last year when Bhutan PM Jigme Thinley seemed to be cosying up to Beijing. He met the Chinese premier in Rio and imported 20 buses from China. India,which has historically supported Bhutan’s foreign policy, including its membership to the UN, was taken by surprise.

The Thinley government has played down his meeting with the Chinese leader, but many in New Delhi aren’t convinced about its purported innocence. In fact, mandarins here view it as a shift in Thimpus foreign policy possibly engineered at the instance of the Thinley government. But it couldn’t be ascertained whether the subsidy cut was linked to this.

Sources in IndianOil told TOI that it stopped supplying subsidised gas and kerosene to Bhutan after it received a communication from the Centre saying that henceforth it will not reimburse the subsidy component of fuels supplied there.