Ujjwala beneficiaries to get only 4 cylinders at lower price:Govt says world’s cheapest cooking gas is available in India

In the Ujjwala Scheme (PMUY), now an additional discount of ₹300 will be available only on the first 4 gas cylinders of the year, whereas earlier it was available on 9 cylinders. This subsidy amount is sent directly to the beneficiaries’ bank accounts (DBT). Additional Secretary of the Petroleum Ministry, Praveen Khanuja, informed on Monday that this decision has been taken due to international LPG prices increasing by up to 46% because of the ongoing war between America and Iran. The price of a 14.2 kg domestic LPG cylinder is ₹942 in Delhi after an increase of ₹29 on Sunday (7 June). In this situation, Ujjwala Scheme beneficiaries are getting cylinders at ₹642. Actual price of domestic LPG cylinders is more than ₹1,600 The Additional Secretary stated that due to rising prices in the international market, the actual cost of domestic LPG cylinders has increased to more than ₹1600. This is causing oil companies to incur a loss (under recovery) of ₹700 per cylinder. By the end of the previous financial year, the total under-recovery on domestic LPG increased to ₹60,000 crore, which was ₹41,338 crore the previous year. The Central Cabinet has approved a compensation of ₹30,000 crore to companies for this. While the subsidy received by customers is in addition to this relief amount. Companies facing daily loss of ₹600-700 crore on petrol diesel
The Additional Secretary also informed in the briefing that apart from LPG, oil companies are currently bearing losses of ₹30 per liter on diesel and ₹6 per liter on petrol. Due to this, companies are incurring a daily loss of approximately ₹600 to 700 crore every day. Saudi LPG benchmark became 46% costlier due to West Asia tension India imports 60% of its LPG requirements. Its landed cost is determined by the Saudi Contract Price (CP), which Saudi Aramco fixes at the beginning of every month. Gas prices have surged significantly after the closure of the Strait of Hormuz in late February in West Asia. In February, the Saudi CP benchmark for LPG was around $543 per ton, which has now increased to $790 per ton in June. This means the international benchmark for LPG has risen by 46% since the crisis began. This has made propane 39% more expensive and butane 52% more expensive. The world’s cheapest cooking gas is available in India Meanwhile, the government says that amid fluctuations in crude oil and gas prices worldwide, Indian households are getting the cheapest cooking gas. The price of domestic LPG (LPG) cylinders in India is significantly lower compared to neighboring countries and advanced economies like America and Australia. Currently, the government itself is bearing the burden of rising costs in the international market and it has not been allowed to be passed on to common consumers. Commercial cylinder for hotels restaurants became ₹3,113.50 The prices of commercial cylinders used in hotels and businesses automatically change every month based on international benchmarks. After 5 price increases during the West Asia crisis, a 19-kilogram commercial cylinder in Delhi is being sold at 3,113.50 rupees, which is approximately 164 rupees per kilogram. In comparison, domestic consumers are paying at a rate of only 66 rupees per kilogram. India Continued Supply Even After Hormuz Route Closure About one-third of the world’s oil and 54% of India’s LPG imports happen through the Strait of Hormuz. While most commercial traffic stopped due to conflict on this route, India continued the movement of its ships through better coordination. Indian-flagged tankers continuously brought consignments of crude oil and LPG through this route to Indian ports, ensuring there was no shortage of any petroleum product in the country. Increased domestic production by 60%, started purchasing from USA-Canada To secure supply, India increased domestic LPG production by more than 60%, raising it from approximately 32 TMT to 52 TMT. Along with this, gas purchases were also initiated from countries outside the Hormuz route such as USA, Canada and Algeria. In the available gas supply, priority users like homes along with hospitals and educational institutions were given preference. On the other hand, to reduce demand pressure, customers were encouraged to use Piped Natural Gas (PNG). To prevent theft of domestic gas in the commercial market, OTP-based delivery verification has been increased to 90%. Petrol, Diesel and CNG prices also increased before LPG In the last few weeks, prices of petrol, diesel and CNG have also increased. In May, petrol and diesel prices have increased by a total of ₹7.50 per litre, while CNG has become costlier by around ₹6 per kg. Companies are incurring losses of around ₹11 per litre on petrol and ₹33.6 per litre on diesel. Despite this, companies claim that petrol-diesel are still being sold at prices lower than cost. The government says that the entire burden of the increase in global prices has not been passed on to consumers. Government oil companies are themselves bearing some of the burden of expensive crude oil. How is the price of LPG gas cylinder determined? What is under-recovery? The difference between the price at which oil and gas companies purchase or refine fuel from the international market and the lower price at which they sell fuel to the general public on government directives is called ‘under-recovery’. This is essentially the loss borne by companies to protect customers from inflation. What is the Strait of Hormuz? It is an extremely narrow and important maritime waterway located between the Persian Gulf and the Gulf of Oman. Approximately 20% of the world’s total petroleum and 54% of India’s LPG imports pass through this route, making it the most sensitive route for global energy security.