Coronavirus outbreak: Few takers for free LPG cylinders in lockdown

Since free cylinders will be available only for three months from April to June, it is unlikely to benefit users optimally
Oil-marketing companies have managed to distribute around 68 mill­i­on cooking gas cylinders, as part of the scheme to distribute three free cylind­ers to 80.3 million families in three months. 

Assuming that each of these 68 million cylinders has gone against one connection, the lockdown relief from the government could not reach 12.3 million families with Ujjwala connections. 

According to industry experts, since free cylinders will be available only for three months from April to June, it is unlikely to benefit users optimally, unless the relief gets extended till March 2021. Going by three free 14.2-kg cylinder for one beneficiary, 240.9 million cylinders should be distributed in three months with an estimated outgo of Rs 13,500 crore from the government kitty. 

However, in the first 50 days starting from April 1 to May 20, only 28 per cent of the total target of 240.9 million or only 67.992 million cylinders were delivered, according to data available with the ministry of petroleum and natural gas. Experts indicated that when free cylinders were planned, the government should have considered that the annual rate of refills by the Ujjwala consumers was a mere 2.9 cylinder a connection. 

“In normal circumstances also refill rates are low. A major reason for less lifting now would be that consumption power of families would have declined now. From three meals a day, many poor households wou­ld have shifted to two. In addition, there may be transportation issues, too,” said Dipa Sinha, assistant professor at Ambedkar Univ­e­r­s­ity, and a Right to Fo­od activist. She added that if only one cylinder is delivered to each of these customers in three months, the expected outcome of reducing economic hardship of poor cannot be achieved.

 

According to a re­cent report by the Co­m­ptroller and Auditor General (CAG), the an­n­u­al average cylinder usage under the Ujj­a­wala scheme was around 3.21 refills annually by the end of 2018. As part of the economic response to Covid-19, the government of India had launched the pro-poor scheme “Pradhan Mnatri Garib Kalyan Package” (PMGKP), under which free cylinders were being delivered to Pradhan Mantri Ujjwala Yojana consumers. When asked about this, a government official said, “The beneficiaries were given funds in advance through Direct Benefit Transfer (DBT) in their accounts, so that there was no difficulty in availing this facility. The purpose of the scheme is to have no fuel shortage in poor houses for three months.” 

According to the government, the workers in the supply chain of LPG cylinder delivery have not only been ensuring timely supply of cylinders, but also creating awareness among the beneficiaries about the hygiene and various health guidelines. In April, the first month of Covid-induced lockdown only 45.3 million cylinders were delivered even though the government had given first set of relaxations from April 20. 

“The decision to provide free cylinders to the beneficiaries of PMUY is commendable. However, there are some procedural issues already been highlighted by us to the government and the oil companies,” said Pawan Soni, general secretary, Federation of LPG Distributors of India. He said the government should consider extending the validity period of the scheme up to March 2021 to make maximum use of the relief package. This would also ensure that the three free cylinders can be availed over a period of one year. A government official said a decision in this regard is likely to be taken by the end of June. 

The scheme for three free refills is currently valid from April to June 30, 2020, with a condition that one refill can be taken in a month. According to records, the average annual consumption by PMUY customers is just 2.9 cylinders or approximately one cylinder in four months. That means most of them would consume only one cylinder during the validity period of the scheme, according to historical data.

Critics have earlier questioned the Ujjwala scheme because of its low refills. Some said the price of LPG cylinder even after subsidy is not affordable for poor households but cylinders under the PMGKP are without any cost to consumers. 


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