As many as 7.7 lakh beneficiaries under the Pradhan Mantri Ujjwala Yojana (PMUY) scheme have switched to 5 kg liquefied petroleum gas (LPG) cylinders from the standard 14.2 kg domestic cylinders provided to them earlier under the scheme. Among the new PMUY beneficiaries, oil marketing companies (OMCs) have released 8.1 lakh 5 kg connections as on January 1, petroleum minister Rameswar Teli recently informed Parliament.
Under the first phase of the PMUY scheme, 8 crore LPG connections were provided to poor households. Under the second phase of the PMUY scheme — launched in August 2021 — a target of providing one crore LPG connections was set, and the target was extended to an additional 60 lakh connections in January 2022. Under PMUY-2, the beneficiaries are given deposit-free LPG connection along with free first refill and a stove.
With rising global prices, and the government not reinstating subsidy, prices of 14.2 kg LPG cylinders have touched record-high levels (currently Rs 899.5 per cylinder in Delhi). The 5 kg cylinder is priced around Rs 330 in the national capital. Teli also informed Parliament that as many as 2.1 lakh crore PMUY consumers have not come back for refill after installation.
As FE reported earlier, the sale of small 5 kg cylinders supplied by Indian Oil Corporation Ltd (IOCL) recorded a significant jump in FY20 after it was re-launched under the ‘Indane Chhotu’ brand name in December 2020. The government also has a plan to supply small LPG cylinders through its network of fair price shops across the country. Small LPG cylinder sales grew further in FY21 when subsidies on LPG cylinders were stopped.
The government not paying any subsidy on LPG since May 2020 has led to rural households spending nearly 10% of their monthly expenditure on the cooking fuel, a study by the Council on Energy, Environment and Water (CEEW) released in September 2021 had said. The report said 85% households in the country have LPG connections, and 80% of the non-user households cited affordability issues for not having an LPG connection.
The FY23 budgetary estimate for direct benefit transfer subsidy for LPG has been set at Rs 4,000 crore. Although the allocation is around 18% higher than the amount earmarked for FY22 (revised estimate), the figure is significantly lower than the Rs 23,666.6 crore spent on this account in FY21.
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