Cabinet approves Rs 12,000 crore outlay for LPG subsidy to poor

New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Thursday, approved the continuation of the targeted subsidy of Rs 300 per 14.2 kg LPG cylinder, for up to 12 refills per year, to be provided for the poor under the Pradhan Mantri Ujjwala Yojana (PMUY) during FY 2024-25.

The total expenditure will be Rs 12,000 crore for the financial year 2024-25. The subsidy is credited directly to the bank accounts of eligible beneficiaries, according to an official statement.

As of March 1, 2024, there are more than 10.27 crore PMUY beneficiaries.

To make Liquified Petroleum Gas (LPG), a clean cooking fuel, available to rural and deprived poor households, the government launched the Pradhan Mantri Ujjwala Yojana in May 2016, to provide deposit-free LPG connections to adult women of poor households.

India imports about 60 per cent of its LPG requirement. To shield PMUY beneficiaries from the impact of sharp fluctuations in international prices of LPG and to make LPG more affordable to PMUY consumers thereby ensuring sustained usage of LPG by them, the government started a targeted subsidy of Rs 200 per 14.2 kg cylinder for up to 12 refills per annum (and proportionately pro-rated for 5 kg connections) to the PMUY consumers in May 2022.

In October 2023, the government increased the targeted subsidy to Rs 300 per 14.2 kg cylinder for up to 12 refills per annum (and proportionately pro-rated for 5 kg connections). As of February 1, 2024, the effective price of domestic LPG for PMUY consumers is Rs 603 per 14.2 kg LPG cylinder (Delhi).

The average LPG consumption of PMUY consumers has increased by 29 per cent from 3.01 refills in 2019-20 to 3.87 refills (till January 2024) pro-rated for 2023-24. All PMUY beneficiaries are eligible for this targeted subsidy.