Domestic LPG Cylinder
Beneficiaries of Ujjwala scheme will now get only 4 subsidized cylinders in a year. The government has reduced the number of cylinders provided annually from 9 to 4. Pradhan Mantri Ujjwala Yojana (PMUY) was launched in May 2016 to provide deposit-free LPG connections to adult women from poor families. Initially, beneficiaries received 12 subsidized 14.2-kg cylinders a year. Last year, the quota of subsidized cylinders was reduced to nine and now it has been further reduced to four.
Praveen Mal Khanuja, Additional Secretary in the Ministry of Petroleum and Natural Gas, said in a press conference that the changed limit is roughly equal to the average annual consumption of Ujjwala beneficiaries. To promote the use of clean cooking fuel and make it affordable, the government had introduced a targeted subsidy of Rs 200 on a 14.2-kg LPG cylinder in May 2022. This subsidy was deposited directly into the bank accounts of the beneficiaries after every refill purchase of up to 12 cylinders in a year. In October 2023, the subsidy was increased to Rs 300 on 14.2-kg cylinder and the same proportionate benefit was given for 5-kg cylinder.
First the prices increased, now the number of cylinders decreased
This cut in the subsidized quota has been made after the increase in LPG prices. The price of a 14.2-kg cylinder in Delhi has increased by a total of Rs 89 after being increased twice in the last three months. The last increase took place on June 7, taking the retail price to Rs 942. After deducting the subsidy of Rs 300, PMUY beneficiaries have to pay Rs 642 for a 14.2-kg cylinder.
He said that the changed limit broadly reflects the average annual consumption of PMUY households. Compared to the government’s estimated supply cost, beneficiaries actually get assistance of around Rs 1,000 per cylinder. On June 7, the price of cooking gas LPG was increased by Rs 29 per cylinder.
He said that this increase is equivalent to Re 1 per day. He further said that this increase is equivalent to 20 paise per day for a family of five. He said that despite a huge increase in international LPG prices due to the disruptions in West Asia, Indian households are paying the lowest prices in the world for cooking gas.
LPG cost increased
Praveen Mal Khanuja said that after the war in West Asia started in late February, there was a surge in international prices, due to which the cost of supply of domestic LPG cylinder has increased to more than Rs 1,600. The cost of LPG import in India is linked to the Saudi Contract Price (CP), which is the global benchmark for this fuel. The benchmark has gained about 46% since February as supply from the Gulf region has diminished due to blockages related to the Strait of Hormuz.
He said that the government has given subsidy of Rs 52,000 crore since 2022. He said that despite the increase in prices, oil companies are incurring a loss of about Rs 700 on every 14.2 kg cylinder. Apart from LPG, oil companies are also incurring losses by selling petrol and diesel below cost. The under-recovery on petrol was Rs 6 per litre, and on diesel it was around Rs 30 per litre. Explaining the reason for the increase in prices, he said that overall, oil companies are incurring a loss of Rs 600-700 crore. Apart from LPG, oil companies have also increased the prices of petrol and diesel by about Rs 7.50 per liter in four installments last month. The prices of CNG have also been increased by Rs 6 per kg.
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