India Slashes Annual LPG Subsidy for Poor Households to Four Cylinders

The Indian government has significantly cut the annual subsidy for cooking gas cylinders, reducing the number available to 105 million poor households under the Pradhan Mantri Ujjwala Yojana (PMUY) scheme from nine to four. This decision, communicated alongside a ₹29 price hike for a 14.2 kg cylinder, marks a substantial shift from previous government approvals.

Praveen M Khanooja, an additional secretary in the petroleum ministry, defended the move by highlighting the continued financial losses incurred by state-run oil companies. These companies are reportedly losing ₹700 on every 14.2 kg LPG refill, ₹6 per liter on petrol, and ₹30 per liter on diesel. Khanooja emphasized that all cooking gas customers still receive refills at prices ₹700 cheaper than market rates, and PMUY beneficiaries receive a ₹300 subsidy per cylinder for the first four refills annually.

This reduction contrasts sharply with the Union Cabinet's August 2025 approval for nine subsidized cylinders per year. The PMUY scheme, launched in 2016, initially provided free connections to clean fuel for deprived households. Subsequent phases included free cylinders and stoves, and targeted subsidies have varied over the years, including a ₹200 subsidy for up to 12 refills in 2022-23 and 2023-24, later increased to ₹300 in October 2023. The latest decision caps this subsidy at four cylinders per year.

Experts suggest the reduction aims to curb the ballooning fuel subsidy bill, especially amidst global energy market volatility. While average per capita consumption of PMUY consumers has increased, the government's move prioritizes fiscal management over maintaining the previous level of subsidy support. The article notes that global energy markets have been roiled by the war in West Asia, potentially influencing domestic energy policy.

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A PMUY beneficiary will additionally receive the direct benefit transfer of ₹300 a cylinder on the first four refills each year -- broadly the average consumption of a typical Ujjwala household...