Consumption of LPG by Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries has improved to 4.2 refills/year in the last three months after the new coalition government took charge against 3.95 in 2023-24, a government official said. The increase in consumption is attributed to a moderation in prices and an increase in subsidy.
“In the last three months, we have seen changes in the PMUY consumption due to the impact of new connections as well as price reduction,” said the source. “What used to be 3.01 refills for standard 14.2 kg cylinder in a regular family, had increased to 3.95 in 2024. In the last three months, due to moderation in prices along with increase in subsidy, the consumption has grown to 4.2 cylinders for a regular family.”
As of September 1, 103.3 million PMUY connections have been released across the country, as per the government data. LPG coverage in the country has improved from 62% in April 2016 to near saturation now.
However, this is still lower than 4.4 refills recorded in the financial year 2020-21 when the government provided up to three refills free of cost in the light of Covid-19 pandemic.
During the first five months of the current financial year 2024-25, the consumption of LPG increased to 12.4 million tonnes registering an increase of 6.8% from the corresponding period of last fiscal, as per the data from Petroleum Planning and Analysis Cell. Presently, there are 327.69 million total active LPG customers in the country.
The government had launched the scheme back in 2016 with an aim to provide cooking fuel to poor households while discouraging the use of traditional kitchen fuels including cow dung cakes and firewood which are more polluting. The target to release 80 million connections was achieved in 2019.
The government now expects to extend the benefit to 103.5 million households under the scheme by 2025-26.
Last year in August, the government had announced a price cut of Rs 200 per cylinder in LPG prices for all domestic consumers and decided to expand the scheme with additional 7.5 million connections. In October 2023, the government again hiked the subsidy for PMUY consumers by Rs 100 taking it to Rs 300 per cylinder. In March this year, Prime Minister Narendra Modi announced a cut of Rs 100 per LPG cylinder while encouraging the use of LPG cylinders.
Total subsidy given on LPG by the government in the present fiscal stands at Rs 11,925.01 crore against Rs 12,240.0 crore as per revised estimates of FY24. This subsidy, in FY23, stood at Rs 6,817.37 crore. The subsidy amount includes the expenditure on connections given under PMUY.
The Narendra Modi government had earlier said that it will extend PNG connections across the country while expanding the LPG connections under the Ujjwala Yojana. The move is expected to aid in realising the government’s target of increasing the share of natural gas in the energy mix from the present 6.8% to 15% by 2030.
The oil ministry in the first 100 days of governance has also initiated a project through state-run GAIL Ltd to connect isolated gas fields to the national grid. The project is expected to increase the availability of gas by 3.5 million standard cubic meters per day (MSCMD).
The effective cost of the increase is expected to be only about 50 paisa per kg of CNG for the final consumer, as per the official.
The process involves procurement of compressors and using them to convert low pressure gas from isolated fields to high pressure gas, which can be injected into the national gas grid.
The official also informed that the OPaL (ONGC Petro Additions Ltd) petchem plant in Dahej, Gujarat which received the Cabinet’s nod for equity infusion of Rs 10,501 by ONGC last month will make the company viable.
OPaL Petchem plant in Dahej, Gujarat was commissioned in 2017 at a cost of about Rs 30,800 crore. OPaL mainly produces polyethylene and polypropylene and has a 12% domestic market share in polymers. “Infusion of equity and other measures will unlock the valuation of OPaL,” said the source.