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Friday, October 08, 2021

Whats Next on the Ujjwala Scheme ?

The scheme had been virtually withdrawn in September 2019, although no formal declaration was made. Only three States — Haryana, Punjab and Andhra Pradesh — and five Union Territories, were declared kerosene-free at that time.

A 2021 report says that District Nodal Officers have highlighted the issue of PMUY beneficiaries finding it difficult to shell out around Rs 800 per cylinder in one go. This is even though the cylinder lasts them around three months, effectively costing around Rs 250 a month of LPG usage. The 5 kg LPG cylinder option may be more viable.

This was pointed out to the government by many agencies but it paid no heed during the initial years of the scheme. 

Currently on a per kg basis, the LPG in a 14.2 kg domestic cylinder costs around Rs 58 a kg. But it costs roughly Rs 94 a kg in a 5 kg cylinder. According to LPG dealers, the 5 kg cylinders were supposed to be for a migratory population like students, IT professionals , among others who can afford more expensive But it finds hardly any buyers nowadays. The higher cost per kg dissuades consumers that are anyway price sensitive. These issues are soon expected to be addressed by increasing availability of LPG in a 5 kg domestic cylinders that costs around Rs 60 per kg.

The three public sector oil marketing companies are waiting to recover around Rs 4,500 crore from existing PMUY beneficiaries.

PMUY beneficiaries buy LPG cylinders at full cost and recover the loaned amount from the subsidy that is accrued on domestic (14.2 kg) LPG cylinders.

This makes the cylinder unaffordable for a large chunk of beneficiaries who tend to use them sparingly. They often revert to biomass (firewood or cow dung which they get for no additional financial cost) for their primary cooking needs when LPG prices shoot up.

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