LPG subsidy to continue in FY25 but govt wants ineligible beneficiaries out

New Delhi: The existing subsidy of Rs 300 per LPG cylinder, announced last October, will continue until March 31, 2025 but an internal audit will be conducted to identify and weed out existing beneficiaries who may have become ineligible since the Ujjwala scheme was launched in May 2016.

The Finance Ministry, while earmarking Rs 12,000 crore as 2024-25 budgetary support for cooking gas LPG subsidy scheme, wants a policy to be framed for the exclusion of “ineligible beneficiaries” of the Ujjwala scheme as currently there is no provision for removing a beneficiary who may have become ineligible subsequently.

The Ministry also wants the internal audit to delve into the current ceiling of 12 cylinders per annum available to an Ujjwala beneficiary. “Since the per capita consumption of a beneficiary was 3.87 in 2023-24, it would be prudent to bring down the ceiling to four cylinder per year to prevent the leakages,” said sources.

The independent third-party evaluation would be done by the Ministry of Petroleum and Natural Gas, under the supervision of NITI Aayog, and the recommendations would be submitted to Finance Ministry’s Department of Expenditure to consider the next steps, they said.

While extending the subsidy period, Finance has told Petroleum Ministry to treat the Rs 300-subsidy as a ceiling and to calibrate consumer price in case LPG purchase price by oil marketing companies falls substantially. “The idea is to ensure that the consumer price is not reduced to unsustainable levels,” said sources.

Finance also wants Petroleum Ministry to explore if any alternative green fuel – such as heat induction devices powered by solar energy - could be a substitute to LPG for the Ujjwala consumer.

A formal approval to the above measures would be taken up by the new Council of Ministers formed after the general elections results are announced on June 4. The model code of conduct debars the present Cabinet from taking up such proposals. The Centre was providing a subsidy of Rs 200 per 14.2 kg of LPG cylinder to all Pradhan Mantri Ujjwala Yojana consumers since May 2022. This subsidy was raised to Rs 300 per cylinder on October 5, 2023 for fiscal year 2023-24.