New LPG subsidy rules: Check eligibility, subsidy amount, other details
What's the story
Beneficiaries of the Pradhan Mantri Ujjwala Yojana will receive a Rs. 200 subsidy straight into their bank account for buying 14.2kg liquefied petroleum gas (LPG) cylinders. Finance Minister Nirmala Sitharaman recently announced over nine crore beneficiaries will get the subsidy. Notably, since June 2020, there has been no subsidy on LPG cylinders, including for Ujjwala beneficiaries, and everyone has purchased cylinders at market prices.
Context
Why does this story matter?
Last month, cooking gas prices were raised twice, pushing LPG prices above Rs. 1,000. To note, every household in the country is entitled to 12 14.2kg LPG cylinders at subsidized rates every year. Additional purchases beyond this number are to be made at the market price. However, the rates of domestic LPG cylinders vary from state to state due to local taxes.
Announcement
Statement by Sitharaman over LPG subsidy
Nirmala Sitharaman recently announced the decision to provide subsidies to Ujjwala beneficiaries on Twitter. "We will give a subsidy of Rs. 200 per gas cylinder (up to 12 cylinders) to over nine crore beneficiaries of the Pradhan Mantri Ujjwala Yojana. This will help our mothers and sisters," she tweeted. "This will have a revenue implication of around Rs. 6,100 crore a year," she added.
Context
What is Pradhan Mantri Ujjwala Yojana?
The scheme was launched in May 2016 with the intention of making clean cooking fuels, such as LPG, accessible to rural and deprived households. Such households were previously using conventional cooking fuels like firewood, coal, and cow-dung cakes, which have adverse health and environmental impacts. Over 9.17 crore LPG connections have been issued under the program. India has nearly 30.5 crore LPG connections.
LPG rates
Commercial LPG prices slashed by Rs. 135/cylinder
Meanwhile, oil marketing companies (OMCs) have also recently reduced the price of the 19kg commercial LPG cylinder by around Rs. 135. In Delhi, a 19kg commercial LPG cylinder will now cost Rs. 2,219. It would cost Rs. 2,322 in Kolkata, Rs. 2,171.50 in Mumbai, and Rs. 2,373 in Chennai. However, the price of non-subsidized domestic LPG remained unchanged, costing Rs. 1,003/14.2kg cylinder in Delhi.
Details
Cost of non-subsidized LPG remained unchanged
As per the price notification from state-owned fuel retailers on Wednesday, non-subsidized LPG now costs Rs. 1,003/14.2kg cylinder in the national capital, up from Rs. 999.50 previously. To note, the price per cylinder reportedly rose by 193.5% since April 2021. An Oil Ministry official earlier claimed Saudi Arabia's LPG prices have increased by 33% while domestic prices in India have risen by only 11%.
Fact
India imports large amount of oil and gas
India relies on foreign purchases to meet approximately 85% of its oil requirements, making it one of Asia's most vulnerable to rising oil prices. While India has excess oil refining capacity, it does not produce enough LPG to cope with its increasing domestic demands and imports large amounts of it from countries like Saudi Arabia, Livemint reported.