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Domestic LPG cylinder price slashed by Rs 200 in steepest-ever cut

The government slashed the price of domestic LPG cylinders by Rs 200 on Tuesday, the sharpest-ever reduction that will provide relief to more than 33 crore households amid high inflation, ahead of elections in five states, including politically crucial MP, Rajasthan and Chhattisgarh.

The move will also double the relief to Rs 400 for 9.6 crore poor households using free connection given under the ‘Ujjwala’ scheme, one of PM Modi’s flagship social welfare programs, who get a subsidy of Rs 200 under the Covid relief package announced in May. The reduction will entail a burden of Rs 7,600 crore for the exchequer as an additional Ujjwala subsidy.

“This is a gift to crores of my sisters of the country on the occasion of Raksha Bandhan. Our government will always do everything possible that improves people’s quality of life and benefits the poor and middle class,” a government statement quoted the PM as saying. Modi had in his Independence Day speech promised steps to tame inflation.

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The government’s move comes ahead of elections in politically crucial states and is seen as a counter to opposition criticism over inflation and Congress offering cylinders at Rs 500 apiece, a program the party’s government in Rajasthan implemented on Monday.

In the spirit of the PM’s promise, the government also approved 75 lakh additional connections for women under Ujjwala, aiming to expand the footprint to more than 10.3 crore, I&B minister Anurag Thakur told reporters. It is unclear whether the reduction is due to any fall in benchmark LPG prices in the recent past or whether the government will later step in with grants to state-run fuel retailers, as it did last year with a Rs 20,000 crore package.

“We understand the challenges faced by households in managing their budgets. The reduction in cooking gas prices is aimed at providing direct relief to families and individuals, while also supporting the government’s larger goal of ensuring affordable access to essential items,” oil minister Hardeep Singh Puri said.

Education minister Dharmendra Pradhan, who had steered the Ujjwala scheme to Guinness record as oil minister, described the reduction as a “historic step towards improving health, financial and social status of women by providing clean fuel access to every household”.

The reduction in the price of cooking gas cylinders is expected to be the harbinger of more steps, including a possible reduction in petrol and diesel prices by the state-owned fuel retailers, in the coming weeks. Besides, with the Centre’s tax collection remaining buoyant, the Modi administration could unveil more schemes focused on the poor and middle class.

Modi has already announced subsidized loans for affordable housing in urban areas and is due to launch the ambitious PM Vishwakarma Scheme to reach out to the other backward castes.

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