LPG price cut by Rs 200, to cost Rs 903

New Delhi, Aug 29: The government on Tuesday announced a Rs 200 per cylinder cut in prices of domestic cooking gas as it looked to counter the promise of cheaper LPG made by the Congress party in upcoming assembly elections in states like Madhya Pradesh.
At present, a 14.2-kg LPG cylinder in the national capital costs Rs 1,103 – more than double the rate it came for in May 2020.
It will cost Rs 903 when the decision is implemented from Wednesday.
For Ujjwala beneficiaries, the price will be Rs 703 after considering the continuing Rs 200 per cylinder subsidy.
Announcing the decision, Information and Broadcasting Minister Anurag Thakur said the move is aimed at providing relief to households.
Also, the government will provide an additional 75 lakh Ujjwala connections, which will take the total PMUY beneficiaries to 10.35 crores.
Cooking gas prices have shot up in the last couple of years and have become a major election issue.
The Congress party used the high LPG prices, which had burnt a hole in the budgets of households already reeling under a high inflation, effectively used in the recently concluded assembly elections in Karnataka. It has promised to give LPG at Rs 500 per cylinder if voted to power in Madhya Pradesh, where elections are due in November-December. The Congress is also providing the LPG at the same price in Rajasthan, where elections are due in November-December.
Thakur however refused to link the decision with elections saying it was a gift from the Modi government to women on the occasion of Onam and Raksha Bandhan.
While he did not say how the price cut would be financed, it is presumed that state-owned fuel retailers will from Wednesday reduce the prices and will get compensated for the same by the government later.
It is not known how much the decision would cost the exchequer but Thakur said the Rs 200 per cylinder subsidy provided to Ujjwala consumers would cost Rs 7,680 crore in the current financial year ending March 31, 2024 (April 2023 to March 2024).
While Ujjwala beneficiaries are only 9.6 crore, there are some 31 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.
The only subsidy that was available was for poor women who got free connections under Pradhan Mantri Ujjwala Yojana.
The government gave Rs 200 per cylinder subsidy for up to 12 refills in a year. This subsidy was transferred into the bank accounts of the beneficiaries, who bought LPG at market price from the dealer.
The move to cut prices by Rs 200 would bring back the subsidy regime unless the government were to ask the oil companies to absorb the cut and not compensate them. (PTI)