Ujjwala gas cylinders for Rs 503, Hardeep Puri

Hyderabad: Weeks before the upcoming general elections, Prime Minister Narendra Modi announced a Rs 100 per cylinder reduction in cooking gas LPG prices to alleviate the financial burden on households.

Non-subsidised cooking gas prices will be reduced to Rs 803 per 14.2-kg cylinder in the national capital with effect from midnight of Friday/Saturday, according to official sources. Prices vary across states due to local tax rates. The decrease is attributed to the easing of international oil and gas prices, against which domestic fuel rates are benchmarked. However, there was no change in petrol and diesel prices. Petrol and diesel rates have remained unchanged for a record 23 months. All LPG consumers in the country purchase cooking gas at non-subsidized prices. Some, like those who received free connections under the Ujjwala Yojana and consumers in remote areas, receive a fixed subsidy per refill in their bank accounts.

"Today, on Women's Day, our Government has decided to reduce LPG cylinder prices by Rs 100. This will significantly ease the financial burden on millions of households across the country, especially benefiting our Nari Shakti," Modi said in a statement.

This marks the second reduction in cooking gas prices in six months. Prices were cut by Rs 200 per cylinder in late August before assembly elections in five states, including Madhya Pradesh and Rajasthan. That revision brought prices down from a nine-year high of Rs 1,103 per 14.2-kg cylinder to Rs 903, and now the rate has been cut to Rs 803.

"By making cooking gas more affordable, we also aim to support the well-being of families and ensure a healthier environment. This is in line with our commitment to empowering women and ensuring 'Ease of Living' for them," the Prime Minister added.

For the beneficiaries of Pradhan Mantri Ujjwala Yojana (PMUY), who receive Rs 300 per cylinder subsidy, a 14.2-kg LPG cylinder will now cost Rs 503 in the national capital.

"Ujjwala beneficiaries will now get LPG cylinders for only Rs 503 and (other) consumers will get it only for Rs 803," Oil Minister Hardeep Singh Puri mentioned in a statement.

The Union Cabinet, headed by the Prime Minister, recently approved an extension of the Rs 300 per LPG cylinder subsidy to Ujjwala Yojana for another year, until March 2025. Last October, the government increased the subsidy from Rs 200 per 14.2-kg cylinder for up to 12 refills per year to Rs 300 per bottle. This subsidy, which was initially for the current fiscal year ending on March 31, has been extended by the Cabinet Committee on Economic Affairs (CCEA) to 2024-25. This move is expected to benefit nearly 10 crore families, costing the government Rs 12,000 crore.

General elections are scheduled for April-May. Cooking gas prices had risen significantly in recent years, becoming a major election issue. The opposition Congress party highlighted high LPG prices in the 2023 assembly elections in Karnataka, promising to provide LPG at Rs 500 per cylinder if elected in the November/December assembly elections in Madhya Pradesh. In response, Modi's BJP also promised cooking gas at the same rate.

While Ujjwala beneficiaries number about 10 crore, there are over 33 crore domestic cooking gas users in the country. In June 2020, the government discontinued LPG subsidies, and cooking gas prices were set at market rates, reaching Rs 1,103 in the national capital by August 2023. The only available subsidy was for poor women who received free connections under the Pradhan Mantri Ujjwala Yojana and those in remote areas.

To make Liquified Petroleum Gas (LPG), a clean cooking fuel, accessible to rural and economically disadvantaged households, the government launched the Ujjwala scheme in May 2016. The scheme provided deposit-free LPG connections to adult women from poor households, although beneficiaries were required to purchase LPG refills at market prices.

In response to soaring fuel prices, the government provided a Rs 200 per cylinder subsidy to PMUY beneficiaries in May 2022, which was later increased to Rs 300 in October 2023. Additionally, in October 2022, the government granted oil companies a one-time subsidy of Rs 22,000 crore to cover losses incurred from selling LPG below cost in the previous two years.