Ujjwala scheme: Govt cuts subsidised LPG cylinders to 4 for beneficiaries. Here's why  

The Union government on Monday reduced the number of subsidised cooking gas cylinders available annually to beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY) from nine to four. Officials stated that the move aligns fiscal support with actual average household consumption levels.  

Under the flagship scheme launched in May 2016 to provide clean cooking fuel to underprivileged households, beneficiaries were originally entitled to 12 subsidised 14.2-kg LPG cylinders each year. The annual quota was reduced to nine cylinders last year and has now been scaled down further to four.  

At a media briefing, Praveen Mal Khanooja, Additional Secretary in the Ministry of Petroleum and Natural Gas, stated that the revised entitlement broadly reflects the average annual consumption patterns observed among Ujjwala households.  

To maintain affordability, the government introduced a targeted subsidy of ₹200 per 14.2-kg cylinder in May 2022, which was subsequently increased to ₹300 per cylinder in October 2023. This subsidy amount is credited directly to beneficiaries' bank accounts after every refill purchase.  

The policy shift arrives alongside a cumulative ₹89 increase in domestic LPG retail prices over the past three months. Following a ₹29 per cylinder increase on June 7, the retail price of a 14.2-kg LPG cylinder in Delhi stands at ₹942. After adjusting for the ₹300 direct benefit transfer, Ujjwala beneficiaries effectively pay ₹642 per refill for their first four cylinders.  

Addressing the price adjustments, Khanooja noted that the latest ₹29 increase equates to roughly ₹1 per day, or about 20 paise per day for a family of five. He emphasized that Indian consumers continue to pay some of the lowest cooking gas rates globally, despite severe international supply disruptions.  

The cost of supplying a domestic LPG cylinder has risen above ₹1,600 due to a surge in global benchmarks following conflicts in the West Asia that began at the end of February. India imports roughly 60% of its LPG, linking domestic costs directly to the Saudi Contract Price. This global benchmark has risen approximately 46% since February as shipping disruptions around the Strait of Hormuz tightened Gulf exports.  

According to ministry data, the government has provided ₹52,000 crore in LPG subsidies since 2022. Despite the recent domestic retail price hikes, state-run oil marketing companies continue to incur an under-recovery loss of around ₹700 on every 14.2-kg domestic cylinder sold. Cumulative losses for these companies across petrol, diesel, and LPG currently range between ₹600 crore and ₹700 crore.