The Indian government on Tuesday (August 28) cut the price of a 14 kg LPG cylinder by at least Rs 200. The move is aimed at easing the pressure from rising cost of living due to inflation, ahead of key elections both in the states as well as the Lok Sabha (lower house of the Indian Parliament) next year.

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For the Ujjwala scheme beneficiaries, the price drop of an LPG cylinder will be Rs 400 — Rs 200 as price cut and Rs 200 as existing subsidy. For consumers who are not beneficiaries of the Ujjwala scheme, the price cut will be by Rs 200 only. The price cut is effective from August 30.

The government said it will give 75 lakh new gas connections for free in a bid to clear applications related to Pradhan Mantri Ujjwala Yojana (PMUY). With these new connections, the number of PMUY beneficiaries will increase to 10.35 crore.

Terming it as a gift to crores of women on Raksha Bandhan, Prime Minister Narendra Modi said, "Our government will always do everything possible that improves people's quality of life and benefits the poor and middle class."

Petroleum and Natural Gas Minister Hardeep Singh Puri said, "We understand the challenges faced by households in managing their budgets. The reduction in cooking gas prices is aimed at providing direct relief to families and individuals, while also supporting government's larger goal of ensuring affordable access to essential items."

Currently, a domestic LPG cylinder costs Rs 1,053 in Delhi, Rs 1,052.50 in Mumbai, Rs 1,068.50 in Chennai and Rs 1,079 in Kolkata. The oil marketing companies increased the price of domestic LPG cylinder by Rs 50 in July. Earlier, the prices were increased twice in May.

The move comes ahead of Assembly polls in five states — Rajasthan, Chhattisgarh, Madhya Pradesh, Telangana and Mizoram — scheduled for later this year. The Narendra Modi administration's current five-year term at the Centre too comes to an end next year.

Earlier, CNBC-TV18 had reported that the government of India is planning fresh measures to woo voters ahead of the elections. The cut in LPG prices may help in easing household expenses. Inflation in India had hit a 15-month high of 7.44 percent in July 2023, largely due to a spike in food prices.

However, Vinay Jaising of JM Financial Services believes there's more to this cut in LPG prices than sheer politics. "if you look at it over a year, oil prices have actually moved down from $100 per barrel to $80 per barrel. And we are consuming about 50 percent of our net imports from Russia, which is probably at $70-75. So I think the OMCs have in the last quarter or two made disproportionate amount of marketing margins," he said in a conversation with CNBC-TV18.

"I will not be surprised if they cut petrol and diesel prices, as far as the excise duty is concerned as well. I don't think this is to be linked to politics," he added.

LPG was the primary source of energy for 49.4 percent of households in rural areas and 89 percent of urban households across India, according to a recent National Sample Survey Office (NSSO) report. Delhi, Goa, Karnataka, Telangana and Sikkim were among the states where over 90 percent of households were using clean energy for cooking.

The cut in LPG prices is applicable for those who have access to the Pradhan Mantri Ujjwala Yojana (PMUY), which was launched in 2016. In the recently-concluded monsoon session of Parliament, the government said there were 9.59 crore beneficiaries of PM Ujjwala Yojana as on July 1, 2023.

What is Pradhan Mantri Ujjwala Yojana?

Under this flagship scheme, the government aims to provide five crore LPG connections to BPL (below poverty line) families with a support of Rs 1,600 per connection in the next three years. Under the Ujjwala 2.0 scheme, the government made an additional allocation of Rs 1.6 crore for LPG connections, and this provided similar benefits to migrant families as well.

How to apply for Pradhan Mantri Ujjwala Yojana?

Women who are 18 years or older, and without an existing LPG connection in their homes, can apply for the Ujjwala subsidy.

The documents required are as follows:

Aadhaar Card of applicant as proof of identity as well as proof of address (in case applicant is residing at the same address). This is not mandatory for residents in Assam and Meghalaya.

Applicants may also provide the ration card issued by the state government as well as a document certifying family composition.

Migrant workers can provide a self-declaration as per Annexure-I.

You will have to share your bank account number and the IFSC (Indian Financial System Code) to identify the specific branch in which you have the account.

Applicants may apply to any distributor of her choice either by submitting the application at the distributor or by submitting a request through the link provided in this page.

First Published:Aug 29, 2023 2:54 PM IST