Cabinet to decide on extra allocation for cooking gas scheme this month

Dharmendra Pradhan, says he wants at least 280-300 million LPG consumers by 2019

The Cabinet is likely to decide by the end of this month on whether to give another Rs 4,800 crore for the Pradhan Mantri Ujjwala Yojana (PMUY). The scheme aims to provide liquefied petroleum gas (LPG or cooking gas) connections to those not having one.

“The ministry of petroleum has approached the finance ministry to add another 30 million customers to PMUY, from the current year’s target of 50 million,” said an industry source.

Dharmendra Pradhan, petroleum minister, has said he wants at least 280-300 million LPG consumers by 2019. There were 140 million LPG connections when the Narendra Modi government took charge in 2014.

Addition of another 30 million connections is likely to bring another Rs 30,000 crore of investment on LPG infrastructure. “The government has already added 69.5 million connections in three years, taking the overall connections past 220 million. In the next three years, we will be able to reach another 60-80 million customers,” said the sources mentioned earlier.

The push is in the backdrop of the government’s stated aim of reducing crude oil import by at least 10 per cent by 2022. To reach the 50-million target under PMUY, an amount of Rs 8,000 crore was allocated for 2017-18. The government support is about Rs 1,600 for each family. Within the year since launch of PMUY in May 2016, the three government-owned oil marketing companies were able to add 22.9 million connections.

LPG consumption was 21.55 million tonnes (mt) last year, of which about 11 mt came from import. The west coast refinery and Rajasthan refinery plans are expected to meet this and the new connections. Pradhan’s ministry plans 95 per cent LPG penetration by 2020, from 56 per cent in 2014 and 74 per cent now. The ministry says 38 per cent of PMUY beneficiaries are Scheduled Castes and Tribes.

PMUY was launched after the Pahal scheme, started on January 1, 2015, to transfer the LPG subsidy directly to the bank account of a consumer. “Pahal has helped in plugging the subsidy leakage, with estimated savings of Rs 29,446 crore. About Rs 50,000 crore has been transferred to the accounts of customers under Pahal, which has about 174.5 million beneficiaries in the country so far,” says a booklet from the ministry on its three-year performance.