Only 4 LPG cylinders will be available in a year! Government’s big decision amid rising gas prices, ministry gave update

Pradhan Mantri Ujjwala Yojana Latest Update: Amid rising prices of LPG cylinders and higher subsidy expenditure, the Center has taken a big decision on Monday. Now the number of subsidized cooking gas cylinders to the beneficiaries of Pradhan Mantri Ujjwala Yojana (PMUY) in a year has been reduced from nine to four. The objective of the government behind this decision is to provide help according to the level of average domestic consumption.

Under this flagship scheme, launched in May 2016, beneficiaries were initially entitled to 12 subsidized (14.2 kg) LPG cylinders every year. Last year the quota was reduced to nine cylinders and now it has been further reduced to four.

Subsidy of Rs 300 on every cylinder

According to the report of news agency PTI, Additional Secretary in the Ministry of Petroleum and Natural Gas, Praveen Mal Khanuja has given this information. Speaking at a media briefing, he said that the reduced number of cylinders (i.e. 4 cylinders per year) broadly reflects the average annual consumption of the beneficiaries of the Ujjwala scheme. It is noteworthy that the government started a targeted subsidy of Rs 200 on 14.2 kg LPG cylinder in May 2022, which goes directly into the bank account of the beneficiary every time the cylinder is filled.

In October 2023, the subsidy was increased to Rs 300 per cylinder and accordingly benefit was given on 5 kg cylinder also. This new reduction in subsidized quota comes amid repeated increases in LPG prices.

Price of a cylinder after subsidy

The retail price of a 14.2 kg cylinder in Delhi has increased by a total of Rs 89 after being hiked twice in the last three months, including the latest increase on June 7, which took the price to Rs 942 per cylinder. After adjusting the subsidy of Rs 300, beneficiaries of Pradhan Mantri Ujjwala Yojana pay Rs 642.

According to Khanuja, beneficiaries actually get assistance of around Rs 1,000 per cylinder, compared to the government’s estimated supply cost of around Rs 1,600 per cylinder. On June 7, cooking gas prices were increased by Rs 29 per cylinder.
He said the increase is of Re 1 per day and added that for a family of five, the increase works out to about 20 paise per day.

Cheapest LPG cylinder in India

Additional Secretary Praveen Mal Khanuja said that middle east Despite a sharp rise in international LPG prices following the disruptions, the gas is the cheapest available in India. He said that due to the surge in global LPG prices after the conflict in the Middle East started in late February, the cost of supply of domestic LPG cylinder has increased by more than Rs 1,600.

India’s LPG import cost is linked to the Saudi contract price, which is the global benchmark for the fuel. The benchmark has surged nearly 46% since February as blockages around the Strait of Hormuz reduced supplies from the Gulf region. He said that the government has given Rs 52,000 crore in LPG subsidy from 2022.

Companies suffer loss of Rs 700 per cylinder

Khanuja said that despite the recent increase in prices, oil marketing companies It is incurring a loss of approximately Rs 700 on the sale of every 14.2 kg LPG cylinder. He further said that oil companies are also selling petrol and diesel at below cost. The under-recovery on petrol is Rs 6 per litre, while that on diesel is around Rs 30 per litre.

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Explaining the reason behind the increase in prices, he said that overall, oil companies are incurring a loss of Rs 600-700 crore. Apart from LPG, oil companies have increased the prices of petrol and diesel by about Rs 7.50 per liter in four installments last month. CNG prices have also been increased by Rs 6 per kg.