After the COVID epidemic subsides in the country, the government can now resume the LPG subsidy on LPG. LPG subsidy can be restored from December. According to a report, the central government can restore LPG subsidy from December to control the rapidly increasing LPG price in the country.
The Central Government has stopped the subsidy from July 2020. According to a report of ‘odishatv. In’, LPG subsidy can be given to customers by the central government in December. Saudi Aramco had given the price of propane at $ 870 per metric ton and butane at $ 830 per metric ton, due to which the price of LPG in the domestic market increased sharply.
Propane prices rose from $ 800 to $ 870 and butane from $ 795 to $ 830 per metric ton. LGP cylinder gas is filled with a mixture of propane and butane. Due to the increase in the prices of these two gases, the prices of LPG cylinders increased.
Why the price of cylinder increased
The mixture of butane and propane in the LPG cylinder is in the ratio 60 and 40. Due to the increase in the price of these two gases in the international market, there was an increase in the price of the entire LGP cylinder. In July 2020, the government stopped the subsidy on LPG gas cylinders. At the beginning of 2020, propane and butane prices in the international market had decreased very rapidly.
Then the prices of both the gases were seen around $565 and $590. But by July 2020, these prices came down to $ 360 and $ 340. However, since the beginning of this year, the price of gas has seen a sharp increase. If we look at the 10-month record (January-October 2021), the price of propane has increased by 122 per cent and that of butane by 133 per cent.
What does the SBI report say?
A report by SBI Research has revealed that the rate of LPG refills has come down sharply due to the increase in the price of LPG and the end of the subsidy. Beneficiaries of the PM Ujjwala scheme are also not booking cylinders. As a result, people left cylinders and started cooking with wood, cow dung cakes and other traditional fuels, due to which their prices have also increased.
According to the Union Petroleum Ministry data, out of 8 crore PM Ujjwala scheme beneficiaries, around 4.8 crore consumers have refilled their LPG cylinders at least once in the first quarter of FY 2021-22 against 7.91 in 2020-21. Crore people had booked cylinders.
Reduced allocation in the head of LPG
According to 2021-22, an additional one crore LPG connections will be given to the poorest section of the country. Further, in the same budget document, the allocation for LPG subsidy for the year 2021-22 has been fixed at Rs 14,073 crore, while Rs 36,178 crore was spent in 2020-21.
After deducting the subsidy allocation, a possibility is being raised that the government may reduce the subsidy limit of the Ujjwala scheme from 10 lakhs to 5 lakhs. It is believed that the government will soon start subsidies under Ujjwala, and families whose annual income is Rs 5 lakh or Rs 41000 per month can be given its benefit.