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Govt cuts Ujjwala subsidised LPG quota to four cylinders yearly, aligns with average use, amid LPG price hikes and rising global costs of fuel.
Cooking gas LPG prices were raised on June 7 by Rs 29 per cylinder.
A day after increasing the price of domestic LPG cylinders, the government reduced the number of subsidised cooking gas cylinders available annually to beneficiaries of the Ujjwala scheme to four, aligning the subsidy with average household consumption levels, a senior government official said on Monday.
In May 2016, the government launched the Pradhan Mantri Ujjwala Yojana (PMUY) to provide deposit-free LPG connections to adult women from poor households. Initially, the beneficiaries were entitled to 12 subsidised 14.2-kg cylinders a year.
The quota of subsidised LPG cylinders was reduced to nine last year and has not been decreased to four.
Addressing a news briefing, Additional Secretary in the Ministry of Petroleum & Natural Gas, Praveen Mal Khanooja, said that the revised quota has been set in sync with the average annual consumption of Ujjwala beneficiaries.
Govt’s Subsidised LPG Cylinder Scheme
The government had launched the scheme of targeted subsidy of Rs 200 per 14.2-kg LPG cylinder in May 2022 to encourage the use of cleaner cooking fuel and improve affordability. The money was credited directly to the bank accounts of beneficiaries after every refill was purchased for up to 12 cylinders annually.
In October 2023, the government increased the subsidy to Rs 300 per 14.2-kg cylinder, and the proportionate benefit was extended to 5-kg cylinders.
Also Read: LPG Price Hike: Domestic Cooking Gas Cylinder Becomes Costlier By Rs 29 | Check New Rates
Khanooja said that the revised quota is a broader reflection of the average annual consumption in PMUY households.
Beneficiaries effectively receive a subsidy of around Rs 1,000 per cylinder, based on the government’s estimated supply cost of approximately Rs 1,600 per cylinder.
Increase In LPG Prices
The reduction in the subsidised LPG quota comes amid recent increases in cooking gas prices. The price of a 14.2-kg domestic LPG cylinder in Delhi has risen by a cumulative Rs 89 over two hikes in the past three months, including a Rs 29 increase on June 7, taking the retail price to Rs 942. After the Rs 300 subsidy, PMUY beneficiaries pay Rs 642 per cylinder.
Defending the latest hike, Khanooja said, “The increase comes to Re 1 per day,” adding that for a family of five, the additional burden works out to “20 paisa per day.”
He also said Indian households continue to pay among the lowest prices for cooking gas globally despite a sharp rise in international LPG prices triggered by disruptions in West Asia.
Iran War Shoots Prices Of LPG, Petrol
According to Khanooja, the cost of supplying a domestic LPG cylinder has climbed to over Rs 1,600 following the surge in global prices after the outbreak of war in West Asia at the end of February.
Also Read: LPG Prices Rise Amid Iran War, Yet India’s Cooking Gas Costs Remain Among Lowest
India’s LPG import costs are linked to the Saudi Contract Price (CP), the global benchmark for the fuel, which has increased by around 46% since February due to supply disruptions linked to the Strait of Hormuz.
The government has provided Rs 52,000 crore in LPG subsidies since 2022, he said. Even after the recent price increase, oil marketing companies continue to incur losses of about Rs 700 on every 14.2-kg LPG cylinder sold.
He added that oil companies are also selling petrol and diesel below cost, with under-recoveries of about Rs 6 per litre on petrol and around Rs 30 per litre on diesel.
“Cumulatively, the oil companies are losing Rs 600-700 crore,” he said, explaining the rationale behind the price hikes.
Apart from LPG, petrol and diesel prices were raised by about Rs 7.50 per litre each in four instalments last month, while CNG prices have also been increased by Rs 6 per kg.
With inputs from PTI
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