The Union cabinet approved on Friday a Rs 12,060-crore outlay for beneficiaries of the PM Ujjwala Yojana in the current financial year.
This entails the targeted subsidy of Rs 300 per 14.2 kg cylinder for up to nine refills per year (and proportionately pro-rated for 5 kg cylinder), as per an official release issued on Friday.
The Ujjwala scheme was launched in May 2016 to provide deposit-free liquified petroleum gas connections to adult women from poor households across the country.
Under the scheme, each connection includes a free cylinder security deposit, regulator, Suraksha hose, DGCC booklet and installation. As per the modalities of Ujjwala 2.0, the first refill and stove are also provided at no cost. "PMUY beneficiaries are not required to make any payments for the LPG connection or the first refill or stove as the cost for these is borne by the Government of India/OMCs."
To shield consumers from volatile global LPG prices with India importing about 60% of its LPG, the government began offering targeted subsidies in May 2022. Initially set at Rs 200 per cylinder for up to 12 refills per year, the subsidy was increased to Rs 300 in October 2023.
These efforts appear to be yielding results, as the release emphasised on the improved LPG consumption by households utilising the scheme. Average per capita LPG consumption, which stood at just three refills annually in 2019-20, rose to 3.68 in 2022-23 and has further improved to 4.47 in the last fiscal.
The cabinet had further approved a Rs 30,000-crore fund to reimburse oil market companies for losses in their LPG sales.
This compensation will allow the OMCs to continue meeting their critical requirements, such as crude and LPG procurement, servicing of debt and sustaining their capital expenditure, stated an official release issued following the Cabinet meeting.
The compensation will be paid to the three major public sector OMCs — Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp. — for the under-recoveries incurred on sale of domestic LPG.
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