LPG Gas Cylinder Prices Reduced by Rs 200: Centre Implements Additional Rs 200 Subsidy

LPG Gas Cylinder Prices Reduced by Rs 200: Centre Implements Additional Rs 200 Subsidy
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In a notable move, the Centre has declared its intention to reduce cooking gas prices by Rs 200 per cylinder. Alongside this, the Union Cabinet has granted approval for an additional subsidy under the Ujjwala scheme, with an earmarked amount of Rs 200 as a special Rakshabandhan and Onam gift. This results in a total subsidy of Rs 400 per cylinder for PMUY beneficiaries.

Expanding Ujjwala Scheme Benefits

Additionally, the government has outlined its plans to offer 75 lakh new gas connections through the ‘Pradhan Mantri Ujjwala Yojana’. This initiative seeks to broaden access to clean cooking fuel across households in the country.

Price Decrease for All Users

Union Minister Anurag Thakur elaborated, stating, “The cost of LPG gas cylinders used for domestic purposes has been effectively reduced by Rs 200 per cylinder across the board. Simultaneously, 75 lakh new gas connections will be provided under the Pradhan Mantri Ujjwala Yojana…While Pradhan Mantri Ujjwala Yojana beneficiaries already enjoy a Rs 200 subsidy, they will now benefit from the rate reduction, translating to a Rs 400 reduction per cylinder.

Financial Implications and Oil Marketing Companies

The additional subsidy of Rs 200 per LPG cylinder is estimated to result in a financial commitment of Rs 7,680 crores for the financial year 2023-24. Leading oil marketing companies such as Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Limited (HPCL), and Bharat Petroleum Corporation Limited (BPCL) will be responsible for implementing these changes.

Context and Previous Developments

Earlier in the year, the Committee on Economic Affairs (CCEA) sanctioned a subsidy of Rs 200 per 14.2 kg cylinder, applicable for up to 12 refills annually, for beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY). This latest development is aligned with the government’s continuous efforts to enhance access to clean cooking fuel while providing financial relief to households.

Present and Future Outlook

Currently, the cost of a domestic LPG cylinder stands at Rs 1,053 in Delhi, Rs 1,052.50 in Mumbai, Rs 1,068.50 in Chennai, and Rs 1,079 in Kolkata. This price reduction is expected to alleviate financial burdens for consumers and contribute to the government’s goals of promoting affordable and cleaner cooking options.

Impact on Household Expenses and Inflation

The decrease in LPG prices arrives at a time when inflation has reached a 15-month high of 7.44 percent in July 2023, largely due to surges in food prices. This reduction is expected to provide relief to household budgets impacted by rising costs.

Appreciation and Political Implications

Union Finance Minister Nirmala Sitharaman expressed gratitude, acknowledging the Prime Minister’s thoughtful gesture, referred to as ‘Sneha Upahar,’ on the occasions of Raksha Bandhan and Onam.

Timing and Political Context

It is noteworthy that the reduction in rates and subsidy enhancement aligns with upcoming Assembly polls in states including Rajasthan, Chhattisgarh, Madhya Pradesh, Telangana, and Mizoram, scheduled for later this year. Additionally, the Lok Sabha elections are anticipated at the end of the year, as the NDA government, led by the BJP, seeks a third consecutive five-year term at the Centre.

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