Beneficiaries of Ujjwala returning to unclean fuel due to costly LPG, 25% didn’t take second cylinder

The steep increase in the cost of the Liquified Petroleum gas cylinder is forcing beneficiaries of Pradhan Mantri Ujjwala Yojana (PMUY) to go back to the use of unclean fuel.

In recent research by SBI, it was revealed that even as PMUY has solved the problem of availability of LPG cylinders across the country, the issue of affordability continues to exist. The increase in the price of LPG cylinders has only added to the problems of beneficiaries who can’t afford to buy costly refills, reported The Financial Express.

In the past six months, the cost on non-subsidized LPG cylinder in Delhi has increased by ₹284 from ₹575 per cylinder in August 2010 to ₹859 in February 2020.

The research has also suggested a number of measures in its recent Ecowrap report. One of the suggestions include providing four free LPG cylinders every year to the beneficiaries.

As per state wise analysis of refill data of 5.92 crore connection installed till December 2018 and refill upto June 3, 2019. The research found that 24.6 per cent of beneficiaries never went for the second refill, 17.9 per cent consumers refilled either 1 or 2 cylinders, 11.7 per cent refilled three cylinders and 45.8 per cent consumers refilled four or more cylinders, reported The Financial Express

“This indicates that 54.2 per cent of total PMUY consumers consumed up to 3 cylinders in a year or more. However logic suggests that a family of 4 requires at least 3-4 cylinders per year. This means that people are not using PMUY cylinders on regular basis,” the SBI Research has said.

The report further said that Pradhan Mantri Ujjwala Yojana use among the rural households with low per capita income may be lower due to continuous increase in LPG prices. “The beneficiaries are going back to use of unclean fuel (hazardous to their health also) as soon as the free cylinders get exhausted,” it has concluded.

According to a report in Financial Express, SBI Research report has made numerous suggestions that could help in preventing beneficiaries from going back to unclean fuel. The research points out the need to improve the targeting of LPG Subsidy. It is currently availed by over 85 per cent of customers. It can be done by creating a comprehensive database and then provide these people with a maximum of four free cylinders in a year.

“The Government can do this with the help of creating a comprehensive merged database using databases of Ayushman Bharat, PM-KISAN, PMJDY, PMUY and MUDRA and then provide these people with maximum four free cylinders in a year,” said the report.

“Even if 4 crore people are eligible for this then the total cost to exchequer per year will be maximum ₹12,800 crore (4 crore x 4 x ₹ 800 per cylinder),” it adds.

SBI report also states that the number of subsidised cylinders per annum to households can be reduced from the current 12 to 9, which would be sufficient for most households.