The silent LPG revolution

The Ujjwala scheme is enabling rural women to escape the drudgery and negative health effects of using firewood. The implementation story has been good so far, but details need to be addressed, writes Richa Mishra

“Humko dilli bulaya hai, jaaye kya…Itna door jaane pe Modi ji kucch dengey kya (I have been called to Delhi, should I go…Will Modi ji give something if I travel so far?)” asks Guddi Devi.

Guddi is among the first beneficiaries of Pradhan Mantri Ujjwala Scheme (PMUY) – the scheme for providing LPG connections to the women of Below Poverty Line (BPL) households – who have been asked to come for the LPG panchayat, an awareness drive being undertaken by the government.

Guddi, who is from Ballia, Uttar Pradesh, was among those who were given a connection during the launch of the scheme in 2016. “Suvidha to bahut hota hai LPG se, per dam bhi hai… Bachchat karma padata hai cylinder ke liye. (There are benefits of LPG use, but it is costly…I have to save to get a refill),” says 30-year-old Guddi.

She is not alone, as the issue of pricing concerns all beneficiaries like her across the country.

Though everyone agrees that the use of LPG as cooking fuel has its advantages, those who have access to alternative cooking fuels – wood, cowdung cakes – continue to use it as well.

Meanwhile, Guddi’s semi-urban counterpart, Parvati, who lives in the outskirts of Delhi, says LPG saves her cooking time and is able to work in two more houses as a domestic help.

However, she needs to save for her refills, though the subsidy amount is transferred almost immediately to her account through Direct Benefit Transfer (DBT).

Ujjwala is seen as one of the pet projects of the Prime Minister Narendra Modi. And it also has shown that Ujjwala can get votes as seen in Uttar Pradesh. PMUY is rightly seen as one that lifts the health and quality of life of rural women.

The scheme also marks a paradigm policy shift, from improving the quality of chulhas to shifting away from it altogether. While more than 15 per cent of rural households use LPG, firewood remains the dominant fuel.

How it all works

How did Guddi and Parvati, both below the poverty line as per the Socio Economic Caste Census, get their new connection? The customer, however, has to pay for the LPG stove and first refill charges. She can make an upfront payment or get into an EMI with the oil marketing company to pay for the LPG stove, or the first refill.

In the event of a loan, the cost of the LPG stove is adjusted against the subsequent subsidy amounts on each cylinder.

Since PMUY’s 32 million customers, of the 25 crore LPG customers, are largely in the BPL category, paying an additional ₹300 for a cylinder (roughly the difference between the subsidised price and market price) can make them feel the pinch.

Whether this leads to a lower rate of refills in the future is a moot issue.

Refill conundrum

The Economic Survey 2017-18 claims that 79 per cent of the PMUY beneficiaries return for refills, taking as many as four refills per year on an average. This is impressive.

Critics have raised questions, saying that LPG refills have not kept pace with the issue of connections. This difference can be attributed to various factors, such as the shift to CNG in metros, and the fact that the cylinder use data includes PMUY and general consumers and, therefore, cannot be used to draw conclusions on PMUY refills.

Ashok Sreenivas, Senior Fellow, Prayas Energy Group, observes: “There needs to be more data in the public domain on Ujjwala refills. The claims of the Survey are not substantiated by publicly available data, nor does the Survey explain the methodology used to arrive at its numbers.”

A senior petroleum ministry official counters: “Today, we have 25 crore-plus registered customers, out of which, 22 crore are live. Of this 22, about 12 crore are urban and about 10 crore urban plus rural (including those under Ujjwala). We see the trend of the customers who have been there for over a year at least and then work out the average consumption pattern.”

For the urban market, the annual average consumption pattern is seen as 7-7.5 cylinders per household. For rural, urban (which includes small towns), including Ujjwala beneficiaries, it is about 4-6 cylinders annually.

Successes and challenges

But going by the number of connections issued, PMUY has been a success. An impressive 3.3 crore Ujjwala connections have been issued since the inception of the scheme on May 1, 2016, against the target of five crore connections by 2020. On February 7, the Centre decided to ramp up this target to eight crore and allocated an additional ₹4,800 crore to this end after setting aside ₹8,000 crore during the inception of the scheme.

It also decided to expand the scope of beneficiaries to forest dwellers, tea garden tribes and island populations. Going beyond the SECC-BPL grid will improve the viability of the scheme by defraying costs.

Abhishek Jain, Senior Programme Lead, Council on Energy, Environment and Water, says: “Instead of offering non-BPL households subsidy, an initial loan can help. With oil prices on the rise, the price of subsidised LPG will become a key issue in order to retain refill rates. So far, non-subsidised consumers have contributed to marginal savings in subsidies. This can be raised.”

Oil marketing companies, too, have a role to play in checking logistics costs. The GiveItUp scheme is expected to keep subsidies in check. An oil company executive says that the LPG infrastructure in public sector oil companies has been able to take on the demand without disruptions so far.

“More private players are entering the commercial packed LPG segment as well. Entire business of new LPG cylinders are in the hands of private companies. The LPG sector has stakeholders from all streams, including the public sector, JV companies and the private sector,” he added.

However, Sreenivas, says: “Anecdotally, it seems that rural LPG distribution is not an attractive business model, as margins are low.”

Socio-economic dimension

The positive effects of a push to LPG can hardly be overstated, as Minister for Petroleum and Natural Gas points out.

A report, ‘Access to Clean Cooking Energy in India’, by CEEW, says: “In 2016, the International Energy Agency estimated that of the global total of 3.5 million premature annual deaths from household air pollution (HAP), India alone is home to one million.”

The Economic Survey says “the amount of time spent on collecting firewood in India suggests that on an average, women spend around 374 hours every year for collection of firewood”.

But for now, women have to get used to LPG. “Use of alternative fuels allowed the women to sit and cook, while when using LPG as a fuel one has to stand. This calls for change in practice,” says a field officer with a public sector oil company. Sitting and cooking with LPG is a safety issue.

Says Guddi: “Company ke officer log aatey hai baataney ke liye (company officials keep coming to explain how to use LPG).”

NR Bhanumurthy, Professor at National Institute of Public Finance and Policy, says that it has had a positive impact on the social, financial and health of rural woman. “I think it is a fantastic scheme,” he added.

With inputs from A Srinivas

Published on February 12, 2018
TOPICS

MORE FROM BUSINESSLINE


 Getting recommendations just for you...
This article is closed for comments.
Please Email the Editor