New Delhi, June 8: The government has reduced the number of subsidised cooking gas cylinders available annually to beneficiaries of its flagship Ujjwala scheme to four, aligning support with average household consumption levels, a senior government official said on Monday.
Reduction in Ujjwala scheme quota
Under the Pradhan Mantri Ujjwala Yojana (PMUY), launched in May 2016 to provide deposit-free LPG connections to adult women from poor households, beneficiaries were initially entitled to 12 subsidised 14.2-kg cylinders a year. The subsidised quota was reduced to nine cylinders last year and has now been cut further to four.
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.
Targeted subsidy for cleaner fuel
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.
The latest reduction in the subsidised quota follows increases in LPG prices. The price of a 14.2-kg cylinder in Delhi has risen by a cumulative Rs 89 over two hikes in the past three months, the latest on June 7, taking the retail price to Rs 942. After accounting for the Rs 300 subsidy, PMUY beneficiaries pay Rs 642 for a 14.2-kg cylinder.
He said the revised entitlement broadly reflects the average annual consumption among PMUY households. Beneficiaries effectively receive support of about Rs 1,000 per cylinder when compared to the government's estimated supply cost of around Rs 1,600 per cylinder.
Rationale behind price hikes
Cooking gas LPG prices were raised on June 7 by Rs 29 per cylinder. "The increase comes to Re 1 per day," he said, adding that for a family of five, the increase comes to 20 paise per day.
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, he added.
Khanooja said the cost of supplying a domestic LPG cylinder has risen to more than Rs 1,600, following a surge in international prices that followed the outbreak of war in West Asia at the end of February. 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.
The government, he said, has provided Rs 52,000 crore in subsidy since 2022. Despite the price hike, oil companies continue to lose about Rs 700 per 14.2-kg cylinder, he noted.
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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 per litre each in four instalments last month. CNG rates too have been hiked by Rs 6 per kg.
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