Oil ministry wants more funds to get Ujjwala scheme back on track

The Union Ministry of Petroleum and Natural Gas has approached the finance ministry for more funds to bring its flagship Pradhan Mantri Ujjwala Yojana scheme back on track.

The scheme, providing free cooking gas connection to the poor, had accomplished its target of 80 million connections in September this year, six months ahead of the planned deadline of March 2020.

Since then, the scheme has been on a standstill because of a lack of funds as the government allocation of Rs 8,000 crore was exhausted.

“The funding from the government has stopped. However, oil marketing companies are trying to add people who are left out of the scheme,” said Sanjiv Singh, chairman of Indian Oil Corporation (IOC).

On Friday, prices of non-subsidised LPG increased by Rs 76.5 a cylinder (14.2 kg) in Delhi to Rs 681.5. Prices in Kolkata were seen at Rs 706, and Rs 651 a cylinder in Mumbai.

Ujjwala was considered to be the driving force behind several election victories by the Bharatiya Janata Party (BJP) and also helped in raising the country’s overall LPG penetration, from 62 per cent in 2016 to around 95 per cent now. After the completion of 80 million connections under Ujjwala, rise in LPG consumption too reached a stable level now.

“During the first six months of the current financial year, LPG consumption in India was seen at 4.4 per cent. This is compared to 8-12 per cent in recent years due to a rapid rise in customer base,” Singh added.

Based on a data available with the Petroleum Planning and Analysis Cell (PPAC), by the end of September, growth has further declined to 4.1 per cent. This was compared to a cumulative growth rate of 7.2 per cent during the April to September period in 2018. Interestingly, petroleum product consumption registered a negative growth of 0.3 per cent during the month of September 2019 and a cumulative growth of 1.4 per cent during April to September 2019.

At present, there are about 274 million LPG consumers in India, of which 12.9 million are being served by IOC, 70 million by Bharat Petroleum Corporation and 75 million by Hindustan Petroleum Corporation.

Despite the higher rate of penetration, the number of refills by Ujjwala consumers was considerably low. To tackle this, the companies are now promoting the swap option of 5 kg cylinder with existing 14.2 kg cylinders by Ujjwala consumers. OMCs are also giving out more distributorships to do away with supply constraints.

Currently, there are 24,127 LPG distributors in the country.




Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel