PM Ujjwala Yojana: LPG Subsidy Expected to be Extended for FY24

According to an official informed of the development, the union budget for Financial Year 2024 is expected to extend the Ujjwala recipients' subsidy of Rs 200 per cooking gas cylinder for 12 cylinders per year for another year.

In order to provide household cooking gas to regions in states that are currently without it and achieve the aim of 100% LPG coverage, it may potentially extend the Ujjwala plan itself through March 2023.

Finance Minister Nirmala Sitharaman said in May 2021 that nearly 90 million beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY) will get a subsidy of 200 rupees per cylinder for up to 12 cylinders for the current fiscal year (FY23), with an estimated cost of 6,100 crores.

"It's likely that the Rs 200 per cylinder subsidy will last for one more fiscal. Since other states have not yet achieved 100% LPG coverage, the scheme will also continue, according to the official.

The proposal comes at a time when the government also intends to keep up its Ujjwala initiative, which primarily aims to encourage the use of LPG cylinders by providing women from low-income households with the financial help of Rs 1,600 for a new LPG connection as well as free first refills and gas stoves.

The official stated, "The bottom line is that we want to strengthen the scheme, particularly in the northeast." Up to the time of publication, neither the ministry of petroleum and natural gas nor the ministry of finance had responded to inquiries.

Meghalaya has the lowest LPG coverage as of 1 November, with just 54.9%, followed by Tripura, Jharkhand, and Gujarat, with 79.3%, 80.2%, and 80.6%, respectively.

The extension of the Ujjwala Yojana would make sure that free gas connection is offered to all places in the nation despite these gaps in the states.

In addition, the Gujarat BJP government announced in October of this year that it will give away two free LPG cylinders per year to Ujjwala scheme recipients in front of the state's upcoming assembly elections.

On the financial front, the union cabinet authorized in October a one-time payment to oil marketing companies (OMCs) of 22,000 crores to make up for the losses incurred by selling cooking gas below cost.

The government estimated the additional expenditure for petroleum subsidy at Rs 24,944 crore, above the budget allocation of Rs 5,812 crore, which was primarily for payments to OMCs for domestic LPG operations and providing connections under PMUY. The supplementary demand for grants for FY23 was approved by the parliament in its recently concluded winter session.