New Delhi: One day after the Central government’s announcement regarding the reduction of Rs 200 in the price of 14 kg liquefied petroleum gas (LPG) cylinders, it has been clarified that this new compensation or subsidies will not be immediately implemented for oil marketing companies (OMCs), as per a CNBC-Awaaz report.
According to insider sources, assessing the cost impact of this price reduction would be challenging at the moment due to the ample margin available for OMCs with regard to LPG. Additionally, it’s reported that the government plans to evaluate the situation based on consumption patterns and international prices before making a broader decision on price adjustments.
Furthermore, the recently declared subsidy will specifically apply to the 75 lakh new Ujjwala connections, sources have confirmed. The government has indicated its intention to offer 75 lakh new gas connections at no cost to clear applications associated with the Pradhan Mantri Ujjwala Yojana (PMUY), thereby increasing the overall count of PMUY beneficiaries to 10.35 crore.
The price reduction for LPG cylinders totals Rs 400, with Rs 200 as a direct price cut and the remaining Rs 200 as an existing subsidy, targeted at Ujjwala scheme beneficiaries. In contrast, non-Ujjwala consumers will experience a price reduction of Rs 200 exclusively.
On August 29, the Union Cabinet unveiled a reduction in LPG prices for the entire user base of 330 million people in the country, effective from August 30.
Currently, the cost of domestic LPG in New Delhi is Rs 1,103 for a 14.2 kg cylinder. The last change in LPG prices occurred on March 1, which saw a Rs 50 increase per cylinder. Starting August 30, the price will be set at Rs 903 for non-Ujjwala consumers and Rs 703 for Ujjwala beneficiaries.
In the fiscal year 2024 Union Budget, Rs 30,000 crore was allocated as capital support to state-owned oil refining companies.
