The Centre on Tuesday said it would slash the prices of cooking gas by Rs 200 per cylinder. Besides, the Union Cabinet on Tuesday approved an additional subsidy under the Ujjwala scheme. The additional subsidy has been pegged at Rs 200 as a Rakshabandhan, Onam gift. Now, the subsidy will be Rs 400 per cylinder for PMUY beneficiaries.
Besides, 75 lakhs new gas connections will be given under the 'Pradhan Mantri Ujjwala Yojana'.
"The prices of the LPG gas cylinders for domestic use have been brought down by Rs 200 per cylinder, for each and every user. At the same time, 75 lakhs new gas connections will be given under the Pradhan Mantri Ujjwala Yojana...Pradhan Mantri Ujjwala Yojana beneficiaries are already getting Rs 200 subsidy...but they will also benefit from the decrease in the rate, that means the rate reduction for the 'Pradhan Mantri Ujjwala Yojana' beneficiaries will be Rs 400 per cylinder," said Union Minister Anurag Thakur.
"The financial implication of additional subsidy of Rs 200 per LPG cylinder to be Rs 7,680 crores for 2023-24," he said.
The oil marketing companies, Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL), increased the price of domestic LPG cylinder by Rs 50 in July. Earlier, the prices were increased twice in May.
Currently, a domestic LPG cylinder costs Rs 1,053 in Delhi, Rs 1,052.50 in Mumbai, Rs 1,068.50 in Chennai and Rs 1,079 in Kolkata.
Earlier this year in March, the Committee on Economic Affairs (CCEA) approved a subsidy of Rs 200 per 14.2 kg cylinder for up to 12 refills per year to be provided to beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY).
Under the Ujjwala scheme, the Centre offers subsidies to the beneficiaries, who pay market price for LPG refills and receive cash subsidies in their bank accounts. As of March 1, there were 9.59 crore Ujjwala beneficiaries in the country.
In May last year, the government announced a subsidy of Rs 200 per cylinder for Ujjwala beneficiaries as part of its efforts to cushion the impact of high energy prices in the aftermath of Russia’s invasion of Ukraine. For 2022-23, the government’s outgo for this subsidy is pegged at Rs 6,100 crore.
An expenditure of Rs 6,100 crore was earmarked for the financial year 2022-23 and Rs 7,680 crore for 2023-24.
The cut in LPG prices may help in easing household expenses. Inflation hit a 15-month high of 7.44 per cent in July 2023, largely due to a spike in food prices.
The rate cut and subsidy increase come ahead of Assembly polls in five states — Rajasthan, Chhattisgarh, Madhya Pradesh, Telangana and Mizoram — scheduled later this year. The Lok Sabha elections are scheduled for the end of this year. The NDA government, led by BJP, is eyeing a third five-year term at the Centre.
Responding to whether the LPG price cut was on the back of the upcoming elections, Thakur said: "If we were to look at that (state elections), we would have done it (additional subsidy on LPG cylinders) much earlier. But even during that time, whatever the global conditions were – if you look at the Saudi CP (contract prices) prices, from April 2022 it went up 303 percent. But even at that time we gave some relief to the beneficiaries where only 63 percent hike was done. Rest, the Government of India compensated at the time. So it (today's decision) has got nothing to do with any elections. This has all got to do with the relief measures taken and the benefits to be given to 33 crore users."
Hailing the decision, Union Finance Minister Nirmala Sitharaman thanked the Prime Minister for his 'Sneha Upahar' on the occasion on Raksha Bandhan and Onam.