LPG price cut by Rs 100/cylinder

Prime Minister Narendra Modi on Friday announced a Rs 100 per cylinder cut in cooking gas LPG price to ease financial burden on households.

Non-subsidised cooking gas price will be cut to Rs 803 per 14.2-kg cylinder in the national capital with effect from midnight of Friday/Saturday, official sources said.

Prices vary from state to state depending on the incidence on local taxes.

The reduction has been made possible because of easing of international oil and gas prices, against which domestic fuel rates are benchmarked.

However, no change in petrol and diesel prices was announced.

Petrol and diesel prices continue to be on freeze for a record 23 months now.

All LPG consumers in the country buy cooking gas at non-subsidised prices.

Some like the poor women who got free connections under the Ujjwala Yojana, and consumers in remote and far-flung areas are paid a fixed amount of subsidy per refill in their bank accounts.

"Today, on Women's Day, our Government has decided to reduce LPG cylinder prices by Rs 100.

"This will significantly ease the financial burden on millions of households across the country, especially benefiting our Nari Shakti," Modi said in a post on X.

This is the second reduction in cooking gas prices in six months.

Rates were cut by Rs 200 per cylinder in late August ahead of assembly elections in five states, including Madhya Pradesh and Rajasthan.

That revision brought down the prices from a nine-year high of Rs 1,103 per 14.2-kg cylinder to Rs 903 and now the rate has been cut to Rs 803.

"By making cooking gas more affordable, we also aim to support the well-being of families and ensure a healthier environment.

"This is in line with our commitment to empowering women and ensuring 'Ease of Living' for them," the prime minister said.

For the beneficiaries of Pradhan Mantri Ujjwala Yojana (PMUY), who get Rs 300 per cylinder subsidy, a 14.2-kg LPG cylinder will now cost Rs 503 in the national capital.

"Ujjwala beneficiaries will now get LPG cylinders for only Rs 503 and (other) consumers will get it only for Rs 803," Oil Minister Hardeep Singh Puri said in a post on X.

The Union Cabinet headed by the prime minister had on Thursday approved extension of Rs 300 per LPG cylinder subsidy to Ujjwala Yojana for another one year to March 2025.

The government had in October last year hiked the subsidy from Rs 200 per 14.2-kg cylinder for up to 12 refills per year to Rs 300 per bottle.

The Rs 300 per cylinder subsidy was for the current fiscal, which ends on March 31.

The Cabinet Committee on Economic Affairs (CCEA) on Thursday decided to extend this subsidy to 2024-25.

That move, which is likely to benefit nearly 10 crore families, will cost the government Rs 12,000 crore.

General elections are due in April-May.

Cooking gas prices had shot up in the last couple of years and had become a major election issue.

Rates went up by Rs 294 per 14.2-kg cylinder between July 2021 and August 2023.

The opposition Congress party used the high LPG prices, which had burnt a hole in the budgets of households already reeling under high inflation, effectively in the 2023 assembly elections in Karnataka.

It has promised to give LPG at Rs 500 per cylinder if voted to power in Madhya Pradesh in November/December assembly elections, forcing Modi's BJP to also promise cooking gas at the same rate.

While Ujjwala beneficiaries are about 10 crore, there are over 33 crore domestic cooking gas users in the country.

The government in June 2020 stopped giving LPG subsidies.

Cooking gas across the country was priced at market rate, which rose to Rs 1,103 in the national capital in August 2023.

The only subsidy that was available was for poor women who got free connections under Pradhan Mantri Ujjwala Yojana and those in remote and far-flung areas.

To make Liquified Petroleum Gas (LPG), a clean cooking fuel, available to rural and deprived poor households, the government launched Ujjwala scheme in May 2016 to provide deposit-free LPG connections to adult women of poor households.

While the connection was provided for free, the beneficiaries had to purchase LPG refills at market price.

As fuel prices soared, the government in May 2022 provided a Rs 200 per cylinder subsidy to PMUY beneficiaries.

This was increased to Rs 300 in October 2023.

The government in October 2022 provided a one-time grant of Rs 22,000 crore to oil companies to cover for the losses they had incurred on selling LPG at below cost in the previous two years.