Modi's rakhi gift: LPG Rs 200 cheaper

Cooking gas or liquefied petroleum gas (LPG) will be cheaper as the Union Cabinet on Tuesday has decided to cut the price by Rs 200 per cylinder for all households. It also gave an additional subsidy of Rs 200 per cylinder under the PM Ujjwala Yojana (PMUY), giving the beneficiaries a total total subsidy of Rs 400 per cylinder.

With the decision, the government aims at providing a big relief to the people from the rising cost of living due to high inflationary pressure. The decision has been taken by the Union Cabinet at a meeting chaired by Prime Minister Narendra Modi and the price cut will be effective from Wednesday.

Prime Minister Narendra Modi hailed the announcement, saying the festival of Raksha Bandhan is about “increasing happiness within the family.”

“The reduction in gas prices will provide more comfort to sisters in my family and make their life easier. May every sister of mine be happy and healthy, this is my wish from God,” Modi said in a post in Hindi on X (formerly Twitter).

Announcing the decision after the Cabinet meeting, information and broadcasting minister Anurag Thakur refused to link the decision with elections. “Prime Minister Narendra Modi said that this is a gift to crores of sisters of the country on the occasion of Raksha Bandhan. Our government will always do everything possible that improves people’s quality of life and benefits the poor and middle class,” Thakur said.

He said the government would provide an additional 75 lakh Ujjwala connections, which will take the total PMUY beneficiaries to 10.35 crore.

The move comes ahead of Assembly polls later this year in five states — Rajasthan, Chhattisgarh, Madhya Pradesh, Telangana and Mizoram and national polls next year.

Cooking gas prices have shot up in the last couple of years, and it has become a major election issue, mostly among the Opposition. Currently, a domestic 14.2-kg LPG cylinder costs Rs 1,103 in Delhi, more than double its rate in May 2020, Rs 1052.50 in Mumbai, Rs 1068.50 in Chennai and Rs 1,079 in Kolkata. After the Centre’s reduction for instance, it will cost Rs 903 for the general consumer from Wednesday in Delhi, while the price of each cylinder will cost Rs 703 for Ujjwala beneficiaries.

State-owned oil marketing companies (OMCs) like Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Limited  (HPCL) and Bharat Petroleum Corporation Limited  (BPCL) will be compensated for charging less, via a government subsidy.

Thakur further claimed that in 2014, when the BJP came to power, only 14.5 crore citizens had domestic LPG connections, but today that number has increased to 33 crore, in which 9.6 crore have been distributed under the Ujjwala scheme.

Asked about the cost to the exchequer, he did not give details how the price cut would be financed. Thakur said that the Rs 200 per cylinder subsidy provided to Ujjwala consumers would cost Rs 7,680 crore in the financial year ending March 31, 2024.