The Union Cabinet announced a reduction in prices of liquefied petroleum gas (LPG) for all 330 million users in the country in a major relief measure ahead of the festive season.
“All domestic consumers of LPG cylinders to get Rs 200 subsidy per cylinder. Further, users under the PM Ujwala scheme will get this subsidy on top of the existing subsidy," Union information and broadcasting minister Anurag Thakur said at a Cabinet briefing on August 29. The additional subsidy on LPG cylinders will come into effect immediately as a Raksha Bandhan and Onam gift, the minister added.
With this, the subsidy for Ujjwala beneficiaries now stands at Rs 400 per LPG cylinder.
The cut in prices was earlier reported by CNBC Awaaz.
The government also approved 7.5 million additional Ujjwala connections, which will take the total number of Pradhan Mantri Ujjwala Yojana beneficiaries to 103.5 million.
"The financial implication of additional subsidy of Rs 200 per LPG cylinder to be Rs 7,680 crore for 2023-24," Thakur added.
Prime Minister Narendra Modi tweeted, "The festival of Raksha Bandhan is a day to increase happiness in our family. The reduction in gas prices will increase the comfort of the sisters in my family and make their lives easier. May every sister of mine be happy, be healthy, this is my wish to God."
Nothing to do with elections
Asked if the LPG price cut was connected to the upcoming state elections, Thakur said: "If we were to look at that, we would have done it much earlier... So it (today's decision) has got nothing to do with any elections. This has all got to do with the relief measures taken and the benefits to be given to 33 crore users."
Assembly elections are scheduled to be held in Rajasthan, Chhattisgarh, Madhya Pradesh, Telangana and Mizoram later this year. Consumer prices climbed by 7.4 percent in July against expectations of a 6.5 percent increase, led by overall food inflation.
Also Read | Road To 2024: Does inflation affect election outcomes?
LPG prices have not been cut even though crude oil prices have cooled off from recent highs. State-owned Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation are expected to make a formal announcement of the LPG price reduction.
Speaking to news agency ANI, one of the beneficiaries from Kolkata said, "This is a very good decision, if there will be Rs 200 reduction in the prices of cylinders, then it will be very good, because running a household is difficult."
Shares of BPCL and HPCL cooled off from the day's highs soon after CNBC Awaaz's report.
Domestic LPG, which is used as cooking gas, currently costs Rs 1,103 per 14.2 kg cylinder in New Delhi. LPG prices were last changed on March 1, when it was increased by Rs 50 per cylinder.
The Pradhan Mantri Ujjwala Yojana was launched by Prime Minister Narendra Modi on May 1, 2016, to distribute 50 million LPG connections to poor families.
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