Ujjwala Yojana: Big shock to the beneficiaries of Ujjwala Yojana, number of subsidized cylinders reduced.

Ujjwala Scheme: The government has reduced the number of subsidized LPG cylinders to four every year to the beneficiaries of its special Ujjwala Yojana. A senior government official said on Monday that this step has been taken to align the assistance with the average household consumption. The government has reduced the number of cylinders from nine to four annually.

How many cylinders were available earlier?

Pradhan Mantri Ujjwala Yojana (PMUY) was launched in May 2016 to provide LPG connections without deposit to adult women from poor families. Initially, beneficiaries received 12 subsidized 14.2-kg cylinders every year. Last year, the quota of subsidized cylinders was reduced to nine and now it has been further reduced to four.

Why was the scheme started?

Praveen Mal Khanuja, Additional Secretary in the Ministry of Petroleum and Natural Gas, said in a press conference that the changed limit is roughly equal to the average annual consumption of Ujjwala beneficiaries. To promote the use of clean cooking fuel and make it affordable, the government introduced a targeted subsidy of ₹200 on a 14.2 kg LPG cylinder in May 2022. This subsidy was deposited directly into the bank account of the beneficiaries after purchasing every refill, which could be up to 12 cylinders in a year. In October 2023, the subsidy was increased to ₹300 per 14.2 kg cylinder, and the same benefit was extended to 5 kg cylinders as well.

Increase in LPG prices

This reduction in subsidized quota has happened after the increase in LPG prices. After two hikes in the last three months, the price of a 14.2 kg cylinder in Delhi has increased by a total of ₹ 89. The last increase took place on June 7, taking the retail price to ₹942. After the reduction in subsidy of ₹300, PMUY beneficiaries will now have to pay ₹642 for a 14.2 kg cylinder.

He said that the changed limit broadly reflects the average annual consumption of PMUY families. Compared to the government’s estimated supply cost (about ₹1,600 per cylinder), beneficiaries actually get assistance of about ₹1,000 per cylinder. On June 7, LPG prices were increased by ₹29 per cylinder.

“This increase is equivalent to ₹1 per day,” he said. He further said that for a family of five, this is equivalent to 20 paise per day. He said that despite a sharp increase in international LPG prices due to blockages in West Asia, Indian households are paying the lowest prices for cooking gas in the world.

Rise in international prices

Khanuja said that after the fighting in West Asia started in late February, international prices jumped, due to which the cost of supply of domestic LPG cylinder increased to more than ₹1,600. The cost of LPG import in India is linked to the Saudi Contract Price (CP), which is the global benchmark for the fuel. The benchmark has surged nearly 46% since February as blockages in the Strait of Hormuz have reduced supplies from the Gulf region.

He said that the government has given subsidy of ₹52,000 crore from 2022. He said that despite the increase in prices, oil companies are incurring a loss of about ₹700 per 14.2 kg cylinder. Apart from LPG, oil companies are also incurring losses by selling petrol and diesel below cost. Under-recovery (difference between cost and selling price) on petrol was ₹6 per litre, and on diesel it was around ₹30 per litre. Explaining the reason for the price increase, he said, “Overall, oil companies are incurring a loss of ₹600-₹700 crore.” Apart from LPG, oil companies increased the prices of petrol and diesel by about ₹7.50 per liter in four tranches last month. The prices of CNG have also been increased by Rs 6 per kg.

The post Ujjwala Yojana: Big shock to the beneficiaries of Ujjwala Yojana, the number of subsidized cylinders reduced appeared first on Latest.