Why the Central Government Slashed the Ujjwala LPG Subsidised Quota to 4 LPG Cylinders

The Union government has reduced the annual quota of subsidised cooking gas cylinders available to beneficiaries of its flagship Pradhan Mantri Ujjwala Yojana (PMUY) to four. This structural change aligns state fiscal support with the verified average consumption levels of rural and low-income households. The administrative adjustment comes amid escalating international energy benchmarks, which forced a fresh domestic retail price hike of INR 29 per cylinder on June 7.

Sequential Reductions in the Ujjwala Quota

Launched in May 2016, the Pradhan Mantri Ujjwala Yojana was designed to provide deposit-free Liquefied Petroleum Gas (LPG) connections to adult women from economically vulnerable households to replace traditional solid cooking fuels. Initially, beneficiaries were entitled to 12 subsidised 14.2-kg cylinders per year. LPG Price Hike: BJP Leaders Attribute Increase in Cooking Price to Global Crisis.

However, fiscal calibrations led to a reduction of the subsidised quota to nine cylinders last year, before the policy was compressed to the current limit of four. At a news briefing, Praveen Mal Khanooja, Additional Secretary in the Ministry of Petroleum & Natural Gas, stated that the revised entitlement broadly matches the average annual consumption patterns observed among Ujjwala beneficiaries.

International Volatility and Domestic Pricing Pressures

The structural adjustment follows a steep rise in global procurement costs. According to ministry data, the actual cost of supplying a domestic LPG cylinder in India has risen to more than INR 1,600. This upward surge followed geopolitical tensions and the outbreak of conflicts in West Asia at the end of February. India's LPG import costs are inherently linked to the Saudi Contract Price (CP), the recognised global benchmark for the fuel. The benchmark has risen approximately 46 per cent since February, driven largely by supply disruptions surrounding the critical Strait of Hormuz transit corridor.

Despite the domestic price hikes, Khanooja stated that Indian households continue to pay among the lowest rates for cooking gas globally. The government has provided INR 52,000 crore in direct subsidies since 2022 to insulate consumers. However, public-sector oil marketing companies continue to absorb a loss of about INR 700 per 14.2-kg cylinder under current market dynamics.

Revised Retail Math for Consumers

To offset rising costs, the government previously introduced a targeted subsidy of INR 200 per 14.2-kg cylinder in May 2022, which was subsequently increased to INR 300 per cylinder in October 2023. These funds are credited directly to beneficiaries' bank accounts via Direct Benefit Transfer (DBT) post-purchase. Following two cumulative price hikes over the past three months - the latest being the INR 29 adjustment on June 7 - the non-subsidised retail price for a 14.2-kg cylinder in Delhi stands at INR 942. After accounting for the INR 300 central subsidy, PMUY beneficiaries pay an effective rate of INR 642 per refill. LPG Price Hike: India’s Cooking Gas Still Among Cheapest Globally Despite INR 29 Increase, Says Petroleum Ministry.

Defending the latest incremental price shift, Khanooja minimised the immediate daily financial impact on household budgets. "The increase comes to Re 1 per day," Khanooja remarked, adding that for a typical family of five, "the increase comes to 20 paise per day." With the actual state supply expense hovering near INR 1,600 against the Ujjwala end-consumer cost of INR 642, officials emphasise that beneficiaries effectively receive an aggregate support value of about INR 1,000 per cylinder for their allowed annual quota.

(The above story first appeared on LatestLY on Jun 09, 2026 05:13 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).