In a strategic response to the Congress party’s pledge of lower LPG costs in states heading for elections, such as Madhya Pradesh, the Central government declared a cut of Rs 200 per cylinder for domestic cooking gas on Tuesday.
Currently, a 14.2-kg LPG cylinder in the national capital stands at Rs 1,103—a rate that has more than doubled since May 2020. The implemented decision will bring this cost down to Rs 903, beginning Wednesday.
For recipients of the Ujjwala scheme, the pricing will be Rs 703, factoring in the ongoing Rs 200 per cylinder subsidy. Information and Broadcasting Minister Anurag Thakur, while announcing this measure, emphasized its aim to alleviate household burdens.
Despite assertions, Thakur refrained from linking the move to elections, stating it as a gesture from the Modi government to women on the occasions of Onam and Raksha Bandhan.
Furthermore, the government is set to extend an extra 75 lakh Ujjwala connections, boosting the total PMUY beneficiaries to 10.35 crores.
Rising cooking gas prices over recent years have become a prominent electoral concern. Capitalizing on this, the Congress party leveraged the high LPG costs in the Karnataka assembly elections.
Promising LPG at Rs 500 per cylinder if elected in Madhya Pradesh and Rajasthan, where elections are scheduled, the Congress focused on budget-conscious households burdened by inflation.
While funding details for the price cut were not disclosed, it’s presumed that state-owned fuel retailers will initially reduce prices, later receiving compensation from the government.
The financial implications of the decision remain unclear, but Thakur indicated that the Rs 200 per cylinder subsidy for Ujjwala consumers would amount to Rs 7,680 crore in the current fiscal year ending March 31, 2024.
Considering Ujjwala beneficiaries total 9.6 crore while domestic cooking gas users are approximately 31 crore, the decision marks a potential return to the subsidy structure, unless the government requires oil companies to absorb the reduction without compensation.
In October 2022, the government allocated a one-time grant of Rs 22,000 crore to cover oil companies’ losses from selling LPG below cost in the preceding two years.
The official statement announced, “Effective August 30, 2023, the price of a 14.2 kg LPG cylinder will be reduced by Rs 200 in all markets across the country.” This reduction will take the cost of a 14.2 kg cylinder in Delhi from Rs 1,103 to Rs 903.
The across-the-board cut is additional to the existing targeted Rs 200 per cylinder subsidy for PMUY households.
To cater to pending PMUY applications and provide deposit-free LPG connections to eligible households, the government will soon distribute PMUY connections to 75 lakh women from impoverished households without LPG connections.
This move elevates PMUY beneficiaries from 9.6 crore to 10.35 crore, signifying the government’s commitment to easing financial strain and ensuring access to essential commodities at reasonable rates.
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