Ujjwala subsidy trimmed from 9 to 4 cylinders; OMCs still lose Rs 600-700 crore daily

The government has reduced subsidised LPG refills under the Ujjwala scheme to four per year from nine, as oil marketing companies continue to face heavy losses on domestic cooking gas sales.

Written by Saurav Anand

June 8, 2026 23:25 IST

Despite recent fuel price hikes, state-run oil companies are still losing around Rs 700 on every LPG cylinder sold, prompting changes to PMUY subsidy support and efforts to contain under-recoveries.

The government has reduced the number of subsidised LPG refills available annually under the Pradhan Mantri Ujjwala Yojana (PMUY) to four from nine, as state-run oil marketing companies (OMCs) continue to incur losses of ₹600-700 crore a day despite recent fuel price hikes that have sharply reduced under-recoveries on petrol and diesel.

Addressing reporters on Monday, Petroleum ministry additional secretary Praveen Mal Khanooja said under-recoveries on petrol and diesel have fallen to around ₹6 per litre and ₹30 per litre, respectively, following multiple fuel price increases since May 14. However, domestic LPG remains heavily under-priced, with OMCs currently losing about ₹700 on every cylinder sold.

“The under-recovery on diesel is about ₹30 per litre. When you buy diesel in Delhi at ₹95, actually the balance ₹30 is borne by the company and for petrol it is about ₹6 per litre, even now. Daily losses are still to the tune of ₹600-700 crore,” Khanooja said.

According to the official, the government has decided to limit subsidy support under PMUY to four cylinders annually, in line with average household consumption of four to five cylinders a year.

Under the revised structure, PMUY beneficiaries will receive a subsidy of ₹300 per cylinder on four refills annually, amounting to ₹1,200 per household per year. Previously, subsidy support was available on up to nine cylinders.

The latest measure follows two successive increases in domestic LPG prices. Household LPG prices were raised by ₹60 per cylinder in March and by another ₹29 this week, taking the retail price of a 14.2-kg cylinder to ₹942 in Delhi, ₹941.50 in Mumbai and ₹968 in Kolkata.

As per official data, cumulative under-recoveries on domestic LPG reached ₹60,000 crore by the end of the last financial year, up from ₹41,338 crore in the previous year. To partly offset these losses, the Union Cabinet has approved ₹30,000 crore as compensation to the OMCs. The PMUY subsidy is over and above this support, with eligible beneficiaries receiving ₹300 per cylinder directly into their bank accounts, covering more than 10.58 crore Ujjwala connections across the country.

The decision comes even as LPG consumption has weakened. India’s LPG demand fell to 2.13 million tonnes in May, the lowest level since the Covid period, amid higher prices and pressure on household budgets.

The government said that while PMUY households would receive ₹300 per cylinder on the first four refills each year, even non-PMUY consumers continue to pay significantly below market-linked rates. Officials maintained that substantial under-recoveries persist despite recent price revisions.

The official said that the recent fuel price hikes have significantly narrowed OMC losses on auto fuels. In March, under-recoveries were estimated at around ₹26 per litre on petrol and ₹81.90 per litre on diesel, with diesel losses at one stage touching ₹100 per litre. Since then, petrol and diesel prices have been increased by about ₹7.5 per litre, while international crude oil prices have moderated from April highs and are currently below $100 per barrel.

This article was first uploaded on June eight, twenty twenty-six, at twenty-five minutes past eleven in the night.