In a fight against kitchen inflation, the Government on Tuesday announced lowering the price of domestic LPG (Liquefied Petroleum Gas) by 200 with immediate effect for all 33 crore connections. It also decided to issue another 75 lakh connections under PM Ujjawala Yojana (PMUY).

“This is a gift to crores of my sisters of the country on the occasion of Raksha Bandhan. Our Government will always do everything possible that improves people’s quality of life and benefits the poor and middle class,” Prime Minister Narendra Modi said in a tweet after a decision taken by the Cabinet. Since May 2020, there has not been a subsidy on LPG cylinders for connection holders except Ujjawala. Even for Ujjawala, ₹200 per cylinder subsidy was announced only in May 2021.

This step has been initiated when retail inflation based on the Consumer Price Index (CPI) surged to 7.4 per cent, mainly on account of food prices. On August 15, PM Modi said: “I have to take more steps in this direction to minimise the burden of inflation on my countrymen. And we will continue to take that step. My efforts will continue.”.

Giving details of the Cabinet decision, Information & Broadcasting Minister Anurag Singh Thakur said: Government: “This is in addition to already subsidised PM Ujjawal Yojana consumers, wherein they have been given relief of ₹200/cylinder announced during March 2023, incurring total expenditure of ₹7,680 crore for FY 2023-24.” This means the effective cut under Ujjwala would be ₹400, and the cost for them would be around ₹700.

Ujjawala consumers get subsidies through Direct Benefit Transfer (DBT). This means first, they pay the entire price and a subsidy of ₹200 is transferred to their bank accounts. There is no change in this system. However, an additional ₹200 will be reflected in their price. For all other consumers, the cylinder cost will come down, and there is no DBT. For example, a non-subsidised LPG cylinder (14.2 kg) used to cost ₹1,103, now it will cost ₹903.

Commenting on the decision, Oil Minister Hardeep Singh Puri said: “We understand the challenges faced by households in managing their budgets. The reduction in cooking gas prices is aimed at providing direct relief to families and individuals, while also supporting Government’s larger goal of ensuring affordable access to essential items.”

Ujjawala expansion

Thakur also informed that to clear pending PMUY applications and to provide deposit-free LPG connections to all eligible households, Government will shortly start distribution of PMUY connections to 75-lakh women from poor households who do not have an LPG connection. This will increase the total number of beneficiaries under PMUY from 9.6 cr to 10.35 cr.

The Government says targeted support to PMUY consumers encourages them to continuously use LPG. It is important to ensure sustained LPG adoption and usage among PMUY consumers so that they can completely switch to cleaner cooking fuel. The average LPG consumption of PMUY consumers has increased by 20 per cent from 3.01 refills in 2019-20 to 3.68 in 2021-22. All PMUY beneficiaries are eligible for this targeted subsidy, it said.

To make Liquified Petroleum Gas (LPG), a clean cooking fuel, available to rural and deprived poor households, the Government launched the Pradhan Mantri Ujjwala Yojana in May 2016 to provide deposit-free LPG connections to adult women of poor households.