Union Budget 2024: Will the Centre maintain LPG subsidy to support rural India's cooking needs?  Here's what we know

Budget 2024: The Centre might allocate Rs 9,000 crore LPG subsidy in the upcoming full Budget 2024. This would be towards the beneficiaries of Pradhan Mantri Ujjwala Yojana (PMUY), ET Now reported on Thursday. 

After the financial support is allocated by the Centre, it would be given to the oil marketing companies. The financial support for free LPG connections is expected to continue until FY2026. The government has already announced plans to provide over 70,000 new connections under this scheme. This will have a significant impact on the overall LPG subsidy, highlighting the importance of sustainable energy access for all. 

During the interim budget this year ahead of the Lok Sabha elections, Finance Minister Nirmala Sitharaman announced Rs 11,925.01 crore for the total LPG subsidy. The Centre said it will pay Rs 1500 crore to Oil Marketing Companies (OMCs) for direct benefit transfer under the PAHAL Direct Benefit Transfer (DBT) Scheme, where oil companies such as Indian Oil Corporation Limited (IOCL), Hindustan Petroleum Limited Corporation Limited (HPCL), or Bharat Petroleum Corporation Limited (BPCL) provide LPG cash subsidies directly to consumers.

A significant budget allocation of Rs 9094 crore was designated for facilitating the provision of LPG connections to underprivileged households, with the primary objective of aiding Below Poverty Line (BPL) families in moving towards cleaner energy alternatives.

The increase was primarily due to the extension of a cooking gas subsidy of Rs 300 per cylinder to approximately 96 million low-income households. The Pradhan Mantri Ujjwala Yojana (PMUY) was launched in May 2016 to provide deposit-free LPG connections to adult women of poor households. 

In May 2022, the government gave a Rs 200 per cylinder subsidy to PMUY beneficiaries, raised to Rs 300 in October 2023. In late August, cooking gas prices went down by Rs 200 per cylinder before assembly elections in five states. The special help for PMUY consumers caused a 20% rise in LPG use. All PMUY beneficiaries can get the targeted subsidy.

 On March 7, the Union Cabinet sanctioned a targeted subsidy of Rs 300 per 14.2 kg cylinder (and proportionately for 5 kg cylinders) for PMUY beneficiaries. This subsidy, approved a day before International Women’s Day, will cover up to 12 refills per year during FY 2024-25.