Govt Cuts Ujjwala Subsidised LPG Cylinders To 4 from 9 a Year Amid Rising Global Fuel Costs

The Centre has reduced the annual number of subsidised LPG cylinders available under the Pradhan Mantri Ujjwala Yojana (PMUY) from nine to four, saying the revised entitlement reflects average household consumption patterns and comes amid rising international LPG prices.

The Central government has further reduced the number of subsidised cooking gas cylinders available to beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY) from nine to four cylinders per year.

The latest decision marks a significant reduction from the original entitlement of 12 subsidised 14.2-kg LPG cylinders annually when the scheme was launched in 2016. The quota was first cut to nine cylinders last year and has now been reduced to four.

PMUY was introduced in May 2016 to provide deposit-free LPG connections to adult women from economically weaker households and encourage the use of cleaner cooking fuel.

According to Petroleum and Natural Gas Ministry Additional Secretary Praveen Mal Khanooja, the revised quota broadly matches the average annual consumption pattern of Ujjwala beneficiaries.

To make cooking gas more affordable, the government introduced a subsidy of Rs 200 per 14.2-kg cylinder in May 2022, which was later increased to Rs 300 per cylinder in October 2023. The subsidy amount is directly transferred to beneficiaries’ bank accounts after each eligible refill.

Despite the reduction in the subsidised quota, the Rs 300 subsidy per cylinder will continue for the eligible cylinders.

The move comes shortly after another increase in domestic LPG prices. The price of a 14.2-kg LPG cylinder in Delhi has risen by a cumulative Rs 89 over the past three months, including a Rs 29 hike announced on June 7. The retail price now stands at Rs 942 per cylinder, while PMUY beneficiaries pay Rs 642 after accounting for the subsidy.

Khanooja said beneficiaries effectively receive support of nearly Rs 1,000 per cylinder when compared to the government’s estimated supply cost of over Rs 1,600 per cylinder.

The government attributed the decision partly to rising global LPG prices. Officials said India’s LPG import costs are linked to the Saudi Contract Price (CP), the global benchmark for LPG, which has increased by around 46 per cent since February due to supply disruptions linked to tensions in West Asia and the Strait of Hormuz.

The Centre stated that it has provided around Rs 52,000 crore in LPG subsidies since 2022. Officials also claimed that oil marketing companies continue to incur losses of around Rs 700 on every 14.2-kg LPG cylinder sold, despite recent price increases.

The government further noted that petrol, diesel and CNG prices have also been affected by rising global energy costs. According to officials, oil companies are currently facing under-recoveries on fuel sales, prompting periodic price revisions.

The latest change is expected to affect millions of PMUY beneficiaries across the country, particularly households that rely heavily on LPG for daily cooking needs.