In March of this year, the Committee on Economic Affairs granted approval for a subsidy amounting to Rs 200 per 14.2 kg cylinder, allowing beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY) to receive this subsidy for up to 12 refills annually.
The Center announced a reduction of Rs 200 per cylinder for cooking gas prices, along with the Union Cabinet’s approval of an extra Rs 200 subsidy under the Ujjwala scheme as a Rakshabandhan and Onam gift. This increases the total subsidy for PMUY beneficiaries to Rs 400 per cylinder. Additionally, the ‘Pradhan Mantri Ujjwala Yojana’ will offer 75 lakh new gas connections.
Oil marketing companies (Indian Oil Corporation, Hindustan Petroleum Corporation Limited, and Bharat Petroleum Corporation Limited) raised domestic LPG cylinder prices by Rs 50 in July, following two increases in May. Presently, the cost of a domestic LPG cylinder is Rs 1,053 in Delhi, Rs 1,052.50 in Mumbai, Rs 1,068.50 in Chennai, and Rs 1,079 in Kolkata.
Earlier this year in March, the Committee on Economic Affairs (CCEA) sanctioned a subsidy of Rs 200 per 14.2 kg cylinder for up to 12 refills annually for beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY).
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Through the Ujjwala scheme, the government extends subsidies to recipients who purchase LPG refills at market prices and receive cash subsidies directly to their bank accounts. As of March 1, the country had 9.59 crore Ujjwala beneficiaries.
In the previous year’s May, the government introduced a Rs 200 per cylinder subsidy for Ujjwala beneficiaries, aiming to mitigate the impact of soaring energy costs post Russia’s invasion of Ukraine. The projected government expenditure for this subsidy in 2022-23 stands at Rs 6,100 crore.
Allocations of Rs 6,100 crore for the fiscal year 2022-23 and Rs 7,680 crore for 2023-24 were marked.
The reduction in LPG prices could alleviate household financial burdens. In July 2023, inflation surged to a 15-month high of 7.44%, primarily driven by food price hikes.
This subsidy enhancement and rate reduction anticipate upcoming Assembly elections in five states — Madhya Pradesh, Rajasthan, Chhattisgarh, Mizoram, and Telangana — scheduled for later this year. The Lok Sabha elections are also slated for the year-end. The BJP-led NDA government is striving for a third consecutive five-year term at the helm.
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