The government has reduced the annual limit of subsidised LPG cylinders under the ‘Pradhan Mantri Ujjwala Yojana’ (PMUY) from 9 to 4. A senior government official on Monday said that this change was made keeping average household consumption in mind.
Under the scheme, launched in 2016, beneficiaries were initially entitled to 12 subsidised 14.2 kg cylinders per year. However, the number of subsidised cylinders was reduced from 12 to 9 last year, and has now been further lowered to 4.
Subsidy of Rs 300 per cylinder
At a news briefing, Praveen Mal Khanooja, Additional Secretary in the Ministry of Petroleum & Natural Gas, said the revised entitlement broadly matches the average annual consumption of Ujjwala beneficiaries.
He noted that the government aims to provide support based on the beneficiaries’ actual needs.
To encourage the use of cleaner cooking fuel and improve affordability, the government introduced a targeted subsidy of Rs 200 per 14.2-kg LPG cylinder in May 2022, credited directly to beneficiaries’ bank accounts after every refill is purchased for up to 12 cylinders annually. In October 2023, the subsidy was increased to Rs 300 per 14.2-kg cylinder, with a proportionate benefit extended to 5-kg cylinders.
Beneficiaries get LPG cylinders for Rs 642
In Delhi, the price of a 14.2 kg domestic LPG cylinder has reached Rs 942 following two recent price hikes in the past three months. However, after accounting for the Rs 300 subsidy, Ujjwala beneficiaries receive a cylinder for Rs 642.
The official said that, on average, the government incurs a cost of about Rs 1,600 for the delivery of a single cylinder, while providing assistance of approximately Rs 1,000 per cylinder to beneficiaries through the subsidy.
He added that the government has provided subsidies amounting to nearly Rs 52,000 crore since 2022.
Praveen Mal Khanuja stated that despite the recent hike in LPG cylinder prices, domestic LPG prices in India remain lower compared to global levels. Sharp fluctuations in crude oil and LPG prices have been observed in the international market amidst the West Asia crisis. He noted that petroleum companies are incurring a loss of approximately Rs 700 per cylinder on LPG sales.
India’s LPG import costs are linked to the Saudi Contract Price (CP), the global benchmark for the fuel. The benchmark has risen about 46 per cent since February after disruptions linked to the Strait of Hormuz tightened supplies from the Gulf region.
Petroleum companies facing losses of Rs 600–700 crore
Besides LPG, the oil companies are also losing on selling petrol and diesel at rates below cost. On petrol, the under-recovery was Rs 6 a litre, and that of diesel was about Rs 30 per litre. “Cumulatively, the oil companies are losing Rs 600-700 crore,” he said, giving reasons for the price hikes.
Apart from LPG, the oil companies have also raised petrol and diesel prices by about Rs 7.50 a litre each in four instalments last month. CNG rates too have been hiked by Rs 6 per kg.
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