Cooking Gas Prices Sky High, Usage Dropping

Cost of a subsidised LPG cylinder (14.2 kg) has risen by 21 per cent while that of the non-subsidised cylinder has zoomed up by nearly 80 per cent in the past two and a half years, effectively destroying the Pradhan Mantri Ujjwala Yojana (PMUY) as well as family budgets of crores of people. Price data is available with the Petroleum Planning and Analysis Cell of the Ministry of Petroleum and Natural Gas.

The Ujjwala Yojana has been much applauded by the media and the BJP leaders. Over 5 crore women belonging to the officially recognised ‘Below Poverty Line’ (BPL) families were given a one-time subsidy of Rs.1600 for getting an LPG connection and a cylinder. Once the first cylinder was over, families had to get a refill paying the subsidised cost. For many poor families, especially in rural areas, the current cost of Rs.507.42 per cylinder is too steep.

This has led to a piquant situation: families are using the gas sparingly, falling back on traditional cooking fuels like cow-dung cakes, wood etc. Gas consumption data shows a much slower rise than would be indicated with the growth in gas connections from about 16.63 crore in 2016 to 23.47 crore in July 2018, according to the Ministry of Petroleum and Natural Gas. Some reports indicate that “inactive” consumers (those who do not refill within three months) may number up to 15 per cent of all consumers. Other reports suggest that the number could be as high as 3.8 crore.

An Economic Political Weekly (EPW) analysis of May 2018 suggested that this situation was reflected in the falling per capita consumption of LPG, from 9.1 kg per month in 2015-16 to 8 kg per month in 2017.

Meanwhile, the situation of non-subsidised LPG consumers, which form the bulk of Indian consumers is even direr. LPG prices for them have increased dramatically from Rs.527.50 in May 2016 to Rs.942.50 in November 2018 per cylinder. That’s a jump of nearly 80 per cent.

There are reports that a flourishing black market in LPG is in place now with cylinders selling for as much as Rs 1200. For a poor family, which is not BPL, it is impossible to bear this cost. Note that the present definition of BPL is an income of Rs.131 per day, which is ludicrously low.

Modi and his party are relying on the PMUY as one of the premier achievements for gathering votes in the ongoing assembly elections, as well as the forthcoming general election next year. BJP strategists appear to have concluded that if they consolidate the ‘beneficiaries’ of schemes like PMUY, they will have an easy ride.

However, as the rising prices of LPG and falling consumption scenario shows, Modi and BJP may be in for a shock.