PM Ujjwala Yojana– Major setback for common people. The government has taken two important decisions. One is that the loss incurred by the oil marketing companies (OMCs) by selling LPG cylinders at a price lower than the cost will be compensated in installments. Apart from this, the number of cylinders provided under the PM Ujjwala Yojana (PMUY) has been reduced from 12 to 9.
Talking about compensating for LPG losses, the cabinet on Friday approved a cash compensation of Rs 30,000 crores, under which it will be given to the oil marketing companies in 12 installments. The first installment is expected to start in September-October this year.
What will happen if you pay in installments?
The government will compensate the oil marketing companies for the loss of Rs 30 thousand crores due to the sale of LPG cylinders at a price lower than the cost in 12 installments. Due to this, oil marketing companies will get Rs 15 thousand crores in this financial year 2026 and the remaining money will be given in the next financial year 2027 through the new budget which will be presented in February 2026.
According to sources, approval may be sought for withdrawal from the emergency fund for the compensation to be given in this financial year 2026. Now let’s talk about compensating the loss in installments, if Rs 30 thousand crores are given to Indian Oil, Bharat Petroleum and Hindustan Petroleum together, then the fiscal deficit can increase by 8 basis points, whereas if it is given by dividing it in FY 2026 and FY 2027, the financial impact can be reduced. The government has set a target of fiscal deficit of 4.4% of GDP for this financial year 2026.
Subsidy will not be reduced in PM-Ujjwala Yojana
The Cabinet has increased the number of subsidised cylinders under the PM-Ujjwala scheme to nine but the subsidy has not been cut. Approving the scheme’s budget allocation of Rs 12,060 crore for FY26, the government has retained the subsidy of Rs 300 per cylinder on 14.2 kg cylinders. According to government data, LPG consumption by households covered under the PM Ujjwala Yojana has improved from an average per capita consumption of three refills in FY20 to about 4.47 during FY25.