Free LPG scheme gets a makeover
In a move that may impact 80 million families, the government has changed its policy to distribute free cooking gas cylinders. Instead of the Centre giving an advance payment for the scheme, as was announced in April, consumers will now have to pay for the third cylinder first, which will subsequently be reimbursed by the government.
Earlier, beneficiaries under the Pradhan Mantri Ujjwala Yojana (PMUY) were entitled to three free liquefied petroleum gas (LPG) cylinders effective April 1 to June 30 this year.
For the first and second cylinder, advance payments were made by the government. However, on June 5, oil marketing companies (OMCS) came out with a circular that stated that consumers who have received an advance payment in the month of
April or May 2020 and have already utilised the amount would have to purchase an LPG refill for the month of
June on their own.
It added that OMCS such as the
Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation will reimburse the cost of an LPG refill after deducting any outstanding amount after the delivery is confirmed by the distributor in their respective OMC portal.
According to an official source, over
100 million free cylinders were distributed under the scheme till June 15. This would mean that in the first 76 days of the scheme, only 42 per cent of the total cylinders supposed to be distributed in three months have reached beneficiaries.
Going by three free 14.2-kg cylinders for one beneficiary, 240.9 million cylinders should be distributed in three months, with an estimated outgo of ~13,500 crore from the government kitty.
“Because of this arbitrary change, only 30-40 per cent of the below-poverty line (BPL) women beneficaries will have LPG cylinders delivered. They were told at the start of this scheme that they will receive an advance payment of one LPG cylinder in the month of April, May, and June,” said an industry expert.
Interestingly, consumers who have not utilised their advance payment will get the option to utilise it till March 2021. Advance payment for the second cylinder will only be made if the consumer uses the first advance to buy cylinders. The scheme was introduced in the first week of April to reduce the impact of the lockdown on poor families. However, the change will make the cost of cylinders unviable for the common man. In the month of June, the price of a non-subsidised LPG cylinder was increased between ~11.50 and ~37 in four metro cities. In Delhi, the price increased by ~11.5 per cylinder to ~593.
“Since the change in policy was not advertised, BPL ladies will wait for the receipt of advance payment for the month of June, which will never be received by them and thus, they will be devoid of the third free LPG cylinder which was a component of the well-advertised Pradhan Matri Garib Kalyan Yojna,” the source added.