PMUY beneficiaries may continue using around three cylinders a year

Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries appear to be shrugging off the high cost of refills and maintaining the same level of annual consumption at around three cylinders a year.

According to data compiled by the Ministry of Petroleum and Natural Gas, the annualised consumption for this year, based on numbers till September 2021, stands at around 3.7 refills per beneficiary.

This is based on extrapolated data for liquefied petroleum gas (LPG) cylinder refills, senior officials told Business Standard. But this data will vary closer towards the end of the year, considering fire wood availability.

“Since a complete weaning away from firewood or dung for cooking has not happened, PMUY beneficiaries tend to stack LPG with other forms of fuel to meet their requirements. During the rainy season, dry wood availability becomes an issue and LPG consumption gains,” an oil ministry official said.

PMUY beneficiaries had gone in for 3.01-cylinder refills in 2019-20 and three refills in 2018-19. This was when domestic liquefied petroleum gas (LPG) prices were regulated by budgetary subsidies, which varied every month to keep the effective price of a cylinder closer to Rs 500 apiece.

Currently, domestic LPG cylinders (14.2 kg) are sold at market prices but the government continues to subsidise freight for consumers in some parts of the country. The freight subsidy comes to less than Rs 30 per cylinder and is used to bring uniformity in cooking gas prices within a state.

According to Indane, the price of a domestic LPG cylinder is now Rs 884.50 apiece in the national capital. This is the highest price at which a domestic ‘subsidised’ cylinder has been refilled till date.

On an average, PMUY beneficiaries use three (or a little more) cylinders a year. The exception was 2020-21 when the annual consumption shot up to 4.39 refills after three free refills were given by the Centre under the first Atma Nirbhar Bharat package announced in May 2020.

“Since we did not see six cylinders being consumed in 2020-21 by PMUY beneficiaries, it is being assumed that even after three free cylinders, they are not interested in going in for many more refills,” another oil ministry official said.

The Ministry of Petroleum and Natural Gas had introduced PMUY as a flagship scheme with an objective to make LPG available to the rural and deprived households. The targeted homes of lower-income families were otherwise using traditional cooking fuels such as firewood, coal, and cow-dung cakes, among others. The scheme was launched on May 1, 2016 in Ballia, Uttar Pradesh by Prime Minister, Narendra Modi.

Since these connections were targeted for low-income households, they were offered without an upfront cost being borne by the beneficiary. This amount was instead loaned by oil companies who then recovered it from the subsidy, which was accrued on subsequent LPG refills that beneficiaries bought at full price.

Sensing that PMUY beneficiaries were unable to bear the cost of LPG cylinders at full price, the government decided that oil companies should forego the recovery of these interest-free loans. According to official data, over 83 million connections have been disbursed under the first phase of PMUY till date.

The second leg of PMUY was launched this year with the objective of disbursing connections to the remaining targeted beneficiaries. A focus of the exercise is to give connections to migrant families who find it hard to furnish proof of address documents. To make this leg of the programme even more affordable, the first LPG cylinder refill and hotplate (amounting to around ~1,800 for both) is free under PMUY 2.0. This is in addition to the Rs 1,600 upfront amount that is waived for PMUY 2.0 beneficiaries.