New Delhi: The government has reduced the number of subsidised LPG cylinders available each year to beneficiaries of its flagship Ujjwala scheme to four, bringing the entitlement in line with average household consumption, a senior government official said on Monday.
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Under the Pradhan Mantri Ujjwala Yojana (PMUY), launched in May 2016 to give deposit-free LPG connections to adult women from poor households, beneficiaries were initially entitled to 12 subsidised 14.2-kg cylinders a year. That quota was trimmed to nine last year and has now been cut further to four. Praveen Mal Khanooja, Additional Secretary in the Ministry of Petroleum and Natural Gas, told a news briefing that the revised entitlement broadly matches the average annual consumption of Ujjwala households.
To promote cleaner cooking fuel and improve affordability, the government introduced a targeted subsidy of Rs 200 per 14.2-kg cylinder in May 2022, credited directly to beneficiaries' bank accounts after each refill, for up to 12 cylinders a year. The subsidy was raised to Rs 300 per 14.2-kg cylinder in October 2023, with a proportionate benefit extended to 5-kg cylinders.
After accounting for the Rs 300 subsidy, PMUY beneficiaries pay Rs 642 for a 14.2-kg cylinder. Khanooja said beneficiaries effectively receive support of about Rs 1,000 per cylinder against the government's estimated supply cost of around Rs 1,600. The government, he said, has provided Rs 52,000 crore in subsidy since 2022.
The cut follows a series of LPG price increases. 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, of Rs 29, on June 7, taking the retail price to Rs 942. "The increase comes to Re 1 per day," Khanooja said, noting that for a family of five it worked out to about 20 paisa per day for each member.
He said the cost of supplying a domestic cylinder had climbed to more than Rs 1,600 after international prices surged following 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, which has risen about 46 percent since February as disruptions tied to the Strait of Hormuz tightened Gulf supplies. Even so, Indian households continue to pay among the lowest cooking-gas prices in the world, he added.
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Despite the latest hike, oil companies continue to lose about Rs 700 on every 14.2-kg cylinder, Khanooja said. The companies are also selling petrol and diesel below cost, with the under-recovery at Rs 6 a litre on petrol and about Rs 30 a litre on diesel. "Cumulatively, the oil companies are losing Rs 600-700 crore," he said, explaining the rationale for the price increases.
Apart from LPG, oil companies raised petrol and diesel prices by about Rs 7.50 a litre each in four instalments last month, while CNG rates were increased by Rs 6 per kg.
