PM Ujjwala Yojana: The ongoing conflict in West Asia is affecting India. While the continuous rise in gold and silver prices is already straining the pockets of the common man, the public is now set to face another major blow. The Central Government has decided to significantly reduce the number of LPG cylinders provided under the Pradhan Mantri Ujjwala Yojana (PMUY). Beneficiaries of the scheme will now receive only four gas cylinders per year; initially, it was announced that they would be provided with 12 subsidized cylinders.
On June 7, the price of cooking gas (LPG) was raised by ₹29 per cylinder. Following this hike, the price of a 14.2 kg LPG cylinder in the capital, Delhi, has reached ₹942. However, under a Modi government scheme, lakhs of people are still able to obtain LPG cylinders for ₹642. Let us understand this in detail.
What seems to be the issue?
The government provides subsidised cylinders through the Pradhan Mantri Ujjwala Yojana (PMUY). In May 2022, a targeted subsidy of Rs 200 per cylinder was introduced for beneficiaries of the Ujjwala Yojana, which was later raised to Rs 300 in October 2023. This subsidy is credited directly to the beneficiaries’ bank accounts. Consequently, in Delhi, Ujjwala beneficiaries pay Rs 642 more per cylinder than regular customers.
It’s important to mention that the price of a 14.2-kilogram LPG cylinder for regular consumers in Delhi has now reached Rs 942 following two recent price hikes. This marks the second increase in domestic cooking gas prices since the onset of the Middle East crisis, with the previous hike being Rs 60 on March 7th.
In the meantime, the Modi government has cut the annual limit for subsidised LPG cylinders from nine to four. Initially, under the scheme launched in 2016, beneficiaries were entitled to 12 subsidised 14.2-kilogram cylinders each year. However, this was reduced to nine last year and has now been further decreased to four.
Praveen Mal Khanuja, the additional secretary in the Ministry of Petroleum and Natural Gas, noted that the new limit closely aligns with the average annual gas consumption of Ujjwala beneficiaries. He emphasised that the government’s goal is to offer support tailored to the beneficiaries’ needs.
What effect will this have on your stock portfolio?
He noted that petroleum companies are currently losing around Rs 700 per cylinder on LPG sales. Additionally, they are facing losses on petrol and diesel sales as they are being sold below cost. He explained that, overall, petroleum companies are incurring losses of Rs 600-700 crore due to rising oil and gas prices.