New Delhi: The Centre has effectively reduced the number of subsidised LPG cylinders available annually under the Pradhan Mantri Ujjwala Yojana from nine to four, citing mounting under-recoveries faced by state-run oil marketing companies amid volatile global energy prices.
The clarification came from Petroleum Ministry Additional Secretary Praveen M. Khanooja, who stated that public sector oil companies continue to incur significant losses on fuel sales despite recent price revisions.
Oil Companies Facing Heavy Under-Recoveries
According to Khanooja, state-owned oil marketing companies are currently losing:
- Around ₹700 on every 14.2 kg domestic LPG cylinder
- Nearly ₹6 per litre on petrol
- Approximately ₹30 per litre on diesel
He noted that all domestic LPG consumers—around 333.7 million households—continue to receive cooking gas at prices substantially below international market rates.
PMUY Beneficiaries to Get Subsidy on Four Refills
Under the revised arrangement, approximately 105.8 million beneficiaries of the Ujjwala scheme will continue receiving a ₹300 subsidy per cylinder, but only for the first four refills each year.
A Petroleum Ministry statement issued recently confirmed:
“A PMUY beneficiary will additionally receive the direct benefit transfer of ₹300 per cylinder on the first four refills each year.”
The announcement marks a significant reduction from the Cabinet decision taken in August 2025, when subsidy support of ₹300 per cylinder was approved for up to nine refills annually.
Evolution of the Ujjwala Scheme
The Pradhan Mantri Ujjwala Yojana (PMUY) was launched in 2016 in Ballia, Uttar Pradesh, to provide free LPG connections to economically weaker households.
Key milestones include:
- 2016: Free LPG connections introduced
- 2021 (Ujjwala 2.0): Free first cylinder and stove added
- 2020 Pandemic Period: Three free cylinders provided under the Pradhan Mantri Garib Kalyan Yojana
- 2022: ₹200 subsidy introduced for up to 12 refills annually
- 2023: Subsidy increased to ₹300 per cylinder
- 2025: Subsidy capped at nine cylinders annually
- 2026: Subsidy reduced to four cylinders annually
Rising Subsidy Burden
Government data shows the subsidy burden on domestic LPG has increased sharply.
The Petroleum Ministry stated that cumulative LPG under-recoveries reached ₹60,000 crore in 2025-26, compared to ₹41,338 crore in the previous financial year.
To offset part of these losses, the Union Cabinet approved ₹30,000 crore compensation for oil marketing companies.
Consumption Trends Improve
Government initiatives have contributed to increased LPG adoption among PMUY beneficiaries.
Average annual LPG consumption per PMUY household has improved steadily:
- 2019-20: Around 3 refills
- 2022-23: 3.68 refills
- 2024-25: 4.47 refills
Officials say the increase reflects greater acceptance of clean cooking fuel among rural and economically weaker households.
Government Defends Decision
The Petroleum Ministry maintained that Indian consumers continue to enjoy some of the world’s lowest cooking gas prices despite global energy market volatility triggered by geopolitical tensions, particularly the ongoing conflict in West Asia.
Officials argued that the subsidy rationalisation is necessary to contain the growing fiscal burden while ensuring continued support for vulnerable households under the Ujjwala scheme.
The government has not yet disclosed its estimated LPG subsidy expenditure for 2026-27, as international crude oil and LPG prices remain uncertain amid continuing geopolitical tensions.
