Govt cuts subsidised LPG quota for Ujjwala beneficiaries to 4 cylinders a year

The government has cut the number of subsidised cooking gas cylinders available annually to beneficiaries of its flagship Ujjwala scheme to four from nine, a senior official said on Monday.

The move affects beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY), a scheme launched in 2016 to provide free liquefied petroleum gas (LPG) connections to women from poor households.

Under the scheme, beneficiaries were originally entitled to subsidies on up to 12 cylinders of 14.2 kg each per year.

The subsidised quota was reduced to nine cylinders last year and has now been cut further to four cylinders annually.

Praveen Mal Khanooja, additional secretary in the Ministry of Petroleum and Natural Gas, said at a news briefing that the revised entitlement broadly reflects the average annual consumption among PMUY households.

The reduction comes amid a rise in domestic LPG prices driven by higher international energy costs. The retail price of a 14.2-kg cooking gas cylinder in Delhi increased by ₹29 on June 7 to ₹942, following a ₹60 increase in March.

PMUY beneficiaries currently receive a subsidy of ₹300 per cylinder, credited directly to their bank accounts after purchase. As a result, they pay ₹642 for a 14.2-kg cylinder at current prices.

Khanooja said beneficiaries effectively receive support of about ₹1,000 per cylinder when compared with the government's estimated supply cost of around ₹1,600.

The government introduced a targeted subsidy of ₹200 per cylinder in May 2022 to shield poor households from rising fuel prices and increased it to ₹300 in October 2023.

The benefit was available on up to 12 cylinders annually.

Khanooja said the government had spent about ₹52,000 crore on LPG subsidies since 2022.

India, the world's third-largest oil importer and consumer, imports more than half of its LPG requirements.

The country's import costs are linked to the Saudi Contract Price, a benchmark for LPG traded in Asia.

According to the ministry, the benchmark has risen about 46% since February after disruptions linked to conflict in West Asia tightened supplies from the Gulf region.

Khanooja said the cost of supplying a domestic LPG cylinder had risen to more than ₹1,600 following the surge in international prices.

State-run fuel retailers continue to incur losses of around ₹700 on every 14.2-kg domestic LPG cylinder sold, he said.

The official added that oil marketing companies were also selling petrol and diesel below cost, with under-recoveries estimated at ₹6 per litre on petrol and about ₹30 per litre on diesel.

"Cumulatively, the oil companies are losing ₹600-700 crore," he said.