Major setback for Ujjwala connection holders; government reduces the number of subsidized cylinders...

Ujjwala Yojana beneficiaries will now receive only four subsidized cylinders per year. The government has reduced the annual quota of cylinders from nine to four. The Pradhan Mantri Ujjwala Yojana (PMUY) was launched in May 2016 to provide deposit-free LPG connections to adult women from poor families. Initially, beneficiaries received 12 subsidized 14.2-kg cylinders annually. Last year, the quota for subsidized cylinders was reduced to nine, and it has now been further lowered to four.

Praveen Mal Khanuja, Additional Secretary in the Ministry of Petroleum and Natural Gas, stated at a press conference that the revised limit roughly corresponds to the average annual consumption of Ujjwala beneficiaries. To promote the use of clean cooking fuel and make it affordable, the government introduced a targeted subsidy of ₹200 on 14.2-kg LPG cylinders in May 2022. This subsidy was credited directly to the beneficiaries' bank accounts after the purchase of each refill, up to a limit of 12 cylinders per year. In October 2023, the subsidy was increased to ₹300 per 14.2-kg cylinder, with a proportionate benefit extended to 5-kg cylinders as well.

**Price Hikes Followed by a Reduction in Cylinder Quota**
This cut in the subsidized quota follows a rise in LPG prices. In Delhi, the price of a 14.2-kg cylinder has increased by a total of ₹89 following two hikes over the last three months. The last hike occurred on June 7, bringing the retail price to ₹942. After deducting the ₹300 subsidy, PMUY beneficiaries pay ₹642 for a 14.2-kg cylinder.

He noted that the revised limit broadly reflects the average annual consumption of PMUY families. Compared to the government's estimated supply cost, beneficiaries effectively receive assistance of approximately ₹1,000 per cylinder. On June 7, the price of cooking gas (LPG) was raised by ₹29 per cylinder.

He stated that this increase amounts to ₹1 per day. He further added that for a family of five, this hike works out to 20 paise per day. He noted that despite a sharp rise in international LPG prices due to disruptions in West Asia, Indian households pay the lowest prices in the world for cooking gas.

**Increase in LPG Costs**
Praveen Mal Khanuja explained that international prices surged following the outbreak of conflict in West Asia in late February, pushing the supply cost of a domestic LPG cylinder above ₹1,600. The cost of LPG imports into India is linked to the Saudi Contract Price (CP), which serves as the global benchmark for the fuel. This benchmark has risen by approximately 46% since February, as supplies from the Gulf region have been curtailed due to disruptions involving the Strait of Hormuz.

He stated that the government has provided subsidies amounting to ₹52,000 crore since 2022. He noted that despite the price hikes, oil companies are incurring a loss of approximately ₹700 on every 14.2 kg cylinder. Apart from LPG, oil companies are also suffering losses by selling petrol and diesel below cost. The under-recovery stood at ₹6 per litre for petrol and approximately ₹30 per litre for diesel. Explaining the reasons for the price hikes, he mentioned that, overall, oil companies are facing losses of ₹600–700 crore. In addition to LPG, oil companies raised petrol and diesel prices by approximately ₹7.50 per litre in four installments last month. CNG prices have also been increased by ₹6 per kilogram.

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