Government may abolish LPG cylinder subsidy? Here's what we know so far

Government is planning to abolish LPG cylinder subsidy, as per media reports. In the Union Budget 2021, government has reduced allocation for petroleum subsidy (meant for cooking gas and kerosene) to Rs 12,995 crore for 2021-22 from Rs 40,915 crore allocated in 2019-2021. Reports said that the government is likely to use the money mainly on the Ujjwala scheme. 

Presenting the Union Budget 2021, Finance Minister Nirmala Sitharaman had announced the extension of Ujjwala Scheme which has benefited 8 crore households to cover 1 crore more beneficiaries.

Pradhan Mantri Ujjwala Yojana (PMUY) was launched on May 1, 2016 to provide 8 crore deposit free LPG connections to poor households in the country. PMUY aims at providing Free LPG connections to Women from BPL Households. The Scheme provides a financial support of Rs 1,600 for each LPG connection to the BPL households. The identification of eligible BPL families is being made in consultation with the State Governments and the Union Territories.

Under PAHAL scheme, the authorized subsidy to LPG consumers is transferred directly into the bank account of the consumers. The subsidy is transferred either through Aadhaar Transfer Compliant (ATC) or Bank Transfer Compliant (BTC) mode on the basis of seeding of Aadhaar number in bank account.

Meanwhile, the state owned oil marketing companies have left LPG gas prices unchanged on February 1, 2021, while the prices of non-subsidized LPG cylinder has been hiked by Rs 25. The new rates (effective from February 4, 2021) takes the price of LPG cylinder in New Delhi to Rs 719, Lucknow at Rs 757, Noida at Rs 717. The price of commercial (19 kg) LPG cylinder has also been increased by Rs 184 per LPG cylinder price from Rs 1349 to Rs 1533.