Rs 1,103 — This is the price of a non-subsidised LPG cylinder in Delhi currently. A reply by the government in Parliament on Monday showed why this is a worry – the price has nearly doubled from three years ago when a non-subsidised LPG cylinder sold for Rs 581.5 on May 1, 2020.
Travelling across Madhya Pradesh earlier this month, we came across many women complaining about the fact that the LPG cylinder at nearly Rs 1,100 was unaffordable. Some said the monthly payout of Rs 1,000 started by the Shivraj Singh Chouhan government in the state was mostly going into getting an LPG refill. Women are strong voters of the Bharatiya Janata Party (BJP) in many states and in Madhya Pradesh many felt the cylinder prices should be reduced. The government cites how India imports more than 60% of its domestic LPG consumption and the price of LPG in the country is linked to its price in the international market. But political realities are different.
The Congress has already seized it as an electoral issue. In Rajasthan, the Ashok Gehlot government is already providing the LPG cylinder capped at Rs 500 for poor families in the state. Former Madhya Pradesh chief minister Kamal Nath has promised to give the LPG cylinder to the poor at Rs 500 if the Congress comes to power in the state. During the Karnataka elections earlier this year, which the Congress won handsomely, the party’s state president and now deputy CM D.K. Shivkumar had put an LPG cylinder prominently in the media hall of the Congress office and used to pray to it to highlight the high LPG prices. In short, the Congress feels the LPG cylinder is its road to power.
BJP’S EFFORTS
The BJP government at the Centre has been trying to ease the burden on common man and modulate the effective price to consumer for domestic LPG. The Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries are getting a subsidy of Rs 200 per cylinder for up to 12 refills a year for 2022-23 and 2023-24, effectively bringing the price for them down to around Rs 900. During the Covid pandemic in 2020, the government also provided around 14.17 crore free LPG refills to PMUY households under the Pradhan Mantri Gareeb Kalyan Package.
The price hike burden has mainly come during the 2020-21 to 2022-23 period because the average Saudi CP, the international benchmark for LPG pricing, went up from $415 per MT to $712 per MT. The government says the increase in international prices was not fully passed on to Indian citizens, due to which the Oil Marketing Companies (OMCs) suffered under recoveries of approximately Rs 28,000 crore on sale of domestic LPG. To compensate this, the Government has also paid a one-time compensation of Rs 22,000 crore to the OMCs in FY 2022-23.
LPG CONSUMPTION GROWING
The increasing price of LPG has also not impacted consumption, which has, in fact, been growing in India. The consumption of LPG in the country has gone up from 19.62 Million Metric Tonnes (MMT) in 2015-16 to 28.50 MMT in FY 2022-23. Also, the number of domestic LPG consumers has increased from 16.67 crore in 2016 to 31.5 crore in 2023, which includes nearly 10 crore new PMUY beneficiaries. The per capita consumption of LPG by the PMUY households has also gone up from 3.01 refills in 2019-20 to 3.71 refills in 2022-23, figures show.
However, the LPG cylinder is now a major electoral issue, especially in state elections.
The BJP has a challenge here to change the narrative.
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