LPG price cut: Sops only for Ujjwala consumers, no damages to OMCs

The price reduction announced for LPG cylinders is Rs 400 - Rs 200 as price cut and Rs 200 as existing subsidy - for beneficiaries of the Ujjwala scheme.

A day after the Centre's announcement of the Rs 200 price reduction of 14 kg liquefied petroleum gas (LPG) cylinders, it has been clarified that the latest compensation or subsidies will not be rolled out to oil marketing companies (OMCs), as reported by CNBC-Awaaz.

According to sources, given the wider headroom space enjoyed by OMCs on LPG, at present, estimating the cost impact of the price cut would be difficult. Further, the Centre will reportedly review the situation in line with consumption trends and international prices before taking a broader call on the price amendments.

In addition, the latest subsidy announced is limited to the 75 lakh new Ujjwala connections, sources confirmed. The Central government has stated it will provide 75 lakh new gas connections free of cost, in order to clear applications linked to the Pradhan Mantri Ujjwala Yojana (PMUY), taking the total count of PMUY beneficiaries to 10.35 crore.

Also Read: Govt cuts LPG price by Rs 200/cylinder in major relief for consumers ahead of festive season

The price reduction announced for LPG cylinders is Rs 400 - Rs 200 as price cut and Rs 200 as existing subsidy - for beneficiaries of the Ujjwala scheme. Meanwhile, non-Ujjwala consumers will be offered a price cut of Rs 200 only.

On August 29, the Union Cabinet announced a price reduction of LPG for all 330 million users in the country, effective from August 30.

Minister of Petroleum and Natural Gas Hardeep Singh Puri, on August 29, called the latest move "a bold step" on microblogging site X, formerly Twitter, hailing the Narendra Modi-led government for rolling out the latest price reductions for LPG cylinders.

PM Sh @narendramodi Ji has taken the bold step of reducing LPG cylinder price by ₹200/cylinder for all LPG consumers (33 crore connections)
PM Ujjwala Yojana consumers will continue to the get the subsidy of ₹200/cylinder in their accounts.#CabinetDecisions pic.twitter.com/wiPefRwe5n

— Hardeep Singh Puri (@HardeepSPuri) August 29, 2023

The Union Budget for fiscal 2024 had set aside Rs 30,000 crore as capital support to state-run oil refining companies.

(This is a developing story)