LPG Price Cut: Cooking gas prices reduced by Rs 200 for a cylinder in India

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: