Lok Sabha Question No. 73 (STARRED), answered on 2023-12-07
Subject: Subsidy Borne by OMCs
Ministry: PETROLEUM AND NATURAL GAS
Asked by: Pratima Mondal, Sougata Ray

## LOK SABHA

## STARRED QUESTION NO. 73 TO BE ANSWERED ON 07 DECEMBER, 2023

## Subsidy Borne by OMCs

- *73.  SHRIMATI PRATIMA MONDAL:

PROF. SOUGATA RAY:

## पेोलयम और ाक ृतक गैस मंी

Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:

- (a) whether the Government has put the responsibility of proposed subsidy/slashing of prices of LPG on Oil Marketing Companies (OMCs) of the country;
- (b) if so, the details thereof;
- (c) the expected amount of subsidy to be borne by OMCs for the next one year;
- (d) whether such burden would affect the financial stability of OMCs; and
- (e) if so, the details thereof?

## ANSWER

पेोलयम और ाक ृतक गैस मंी ( ी हरदप संह पुर )

## MINISTER OF PETROLEUM AND NATURAL GAS (SHRI HARDEEP SINGH PURI)

- (a) to (e): A statement is laid on the Table of the House.

Statement referred to in reply to parts (a)  to  (e)  of  Lok  Sabha  Starred  Question  No.  73 asked by Shrimati Pratima Mondal and Prof. Sougata Ray to be answered on 07 December 2023 regarding 'Subsidy Borne by OMCs'.

(a) to (e): No Sir. India imports more than 60% of its domestic LPG consumption. Price of LPG  in  the  country  is  linked  to  its  price  in  the  international  market.  However,  Government continues  to  modulate  the  effective  price  to  consumer  for  domestic  LPG.  Accordingly, Government reduced the Retail Selling Price of domestic LPG by Rs. 200 per 14.2 Kg cylinder with effect from 30 th August, 2023.

Under PAHAL Scheme, the domestic LPG cylinders are sold at non-subsidised price and the applicable  subsidy  to  the  consumers  is  transferred  directly  into  their  bank  accounts.  Pradhan Mantri Ujjwala Yojana (PMUY) was started in May, 2016 with an objective to provide access to clean cooking fuel to poor households across the country. Under PMUY scheme, a deposit free LPG  connection  is  provided  to  adult  women  from  poor  households.  As  of  30.09.2023,  9.59 Crore PMUY connections have been released in the country.

During the period 2020-21 to 2022-23, the average Saudi CP (international benchmark for LPG pricing) went up from $415 per MT to $712 per MT.  However, as Government modulates the effective price, the increase in international prices was not fully passed on in retail prices, due to which  the  Oil  Marketing  Companies  (OMCs)  suffered  under  recoveries  on  sale  of  domestic LPG. To compensate this,  the  Government  approved  a  one-time  compensation  of  Rs.  22,000 crore to OMCs in FY 2022-23.  During Covid pandemic, Government also provided about 14.17 Crore  free  LPG  refills  to  PMUY  households  under  Pradhan  Mantri  Gareeb  Kalyan  Package during 2020.

W.e.f. 21 st May, 2022, Government has been providing a budgetary support for targeted subsidy of Rs. 200 per 14.2 Kg cylinder for Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries for upto 12 refills a year for years 2022-23 and 2023-24. Moreover, w.e.f.  5 th October, 2023, the targeted subsidy has been further increased to Rs. 300 per 14.2 Kg cylinder for Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries.