The government has announced that it will only offer subsidies on cooking gas to 9 crore poor women and other beneficiaries who are registered under the Ujjwala scheme and the rest will have to pay the market price for their LPG cylinders.
The government has limited subsidy on cooking gas LPG for only 9 crore poor women and other beneficiaries who got free connections under the Ujjwala scheme and the remaining users including households will pay the market price. Oil Secretary Pankaj Jain at a news briefing said no subsidy is paid on cooking gas since June 2020 and the only subsidy that is provided is the one that Finance Minister Nirmala Sitharaman announced on March 21.
"There was no subsidy for LPG users since the early days of Covid. Since then the only subsidy is one which had been introduced now for Ujjwala beneficiaries," Jain said. Sitharaman while announcing a cut in excise duty on petrol by a record Rs 8 per liter and that on diesel by Rs 6, had stated that Ujjwala scheme beneficiaries will get Rs 200 per cylinder subsidy for 12 bottles in a year to help ease some of the burden arising from cooking gas rates rising to record levels. A 14.2-kg LPG cylinder costs Rs 1,003 in the national capital.
Pradhan Mantri Ujjwala Yojana beneficiaries will get Rs 200 subsidy directly in their bank account and the effective price for them would be Rs 803 per 14.2-kg cylinder. For the rest, it will cost Rs 1,003 in Delhi. The Rs 200 subsidy will cost the government Rs 6,100 crore, she had said. "Subsidies by definition are not designed to get entrenched and increased. Subsidies by definition have to be degressive," Oil Minister Hardeep Singh Puri said at the same conference. The government ended subsidies on petrol in June 2010 and on diesel in November 2014. The same on kerosene ended a couple of years later. And now subsidies on LPG for most have effectively been ended. However, unlike petrol, diesel, and kerosene, there is no formal order ending the subsidies.
The country has nearly 30.5 crore LPG connections. Of this, 9 crores have been provided under PM Ujjwala Yojana. On prices, Puri said the rates of "LPG for domestic consumers have gone up by just 7 percent in last 6 months whereas the Saudi CP (the benchmark used to price LPG) has gone up by 43 percent. This is the reality." Non-subsidized or market priced LPG, which most users other than Ujjwala pay, have gone up by Rs 103.50 per 14.2-kg cylinder since October 2021 and by almost Rs 200 in one year. A 14.2-kg LPG cylinder was priced at Rs 809 in June 2021. Its prices were raised by about Rs 90 in the next four months. Prices were hiked by Rs 50 per cylinder in March and then again in May, rates went up by Rs 3.50.
"We have been, thanks to sound policies, insulating our users from the tremors in the international market and the turmoil," Puri said referring to the rise in rates in Saudi CP and the ones in India. He also refuted reports of a drop in the purchase of refills by Ujjwala beneficiaries once they exhaust their first cylinder post getting free connections. This was attributed to the high prices of LPG. "It is completely untrue," he said. Users taking only one refill has come down from 181 crores during 2019-20 to 1.08 crore in 2021-22 and a majority of customers have taken more than one refill. Also, the per capita consumption of Ujjwala users has increased from 3.01 to 3.68 cylinders during 2021-22.