The initial success of the Pradhan Mantri Ujjwala Yojana (PMUY) scheme notwithstanding, the usage pattern of LPG cylinders by beneficiaries shows a steadily declining trend — with the annual average refill consumption dropping to 3.08 cylinders in the 12 months to September 2019, down from 3.21 refills till December 2018 and 3.66 refills till March 2018.
Over a dozen states are below half the national average consumption of LPG refill cylinders of 6.25 cylinders (14.2 kg) during fiscal 2018-19. The latest Ministry of Petroleum and Natural Gas study that shows usage dropping to 3.08 cylinders tracked the annual refill consumption for the 12-month period spanning October 2018 to September 2019 of PMUY beneficiaries who had enrolled in the initial two years of the scheme — between May 2016 and May 2018.
Earlier this month, a Comptroller and Auditor General (CAG) of India report, too, estimated that the annual average refill consumption of 1.93 crore PMUY consumers (who had completed more than one year as on March 31, 2018) stood at 3.66 refills. Similar analysis for 3.18 crore PMUY beneficiaries as on December 31, 2018 showed refill consumption was at 3.21 refills per annum.
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The scheme, launched on May 1, 2016, provides free cooking gas connections to female members of below poverty line families. The declining consumption, while running counter to the government’s stated objective to eliminate the use of biomass fuels such as firewood for cooking purposes, also has a financial impact for the oil marketing companies (OMCs) as low consumption of refills negatively impacts the recovery of outstanding loan of these companies. Under the programme, since the state OMCs offered deposit-free LPG connections to below poverty line households, the upfront cost of the connection was to be recovered by the companies from the subsidy accrued on subsequent refills by the consumers. A declining trend in the consumption pattern is a negative for OMCs.
The slide in the national average of LPG refill cylinders in respect of PMUY beneficiaries, in that context, is being seen as a red-flag. Assam, Madhya Pradesh, Odisha, Telangana and Rajasthan are among the states where the refill consumption pattern is lower than the average of 3.08 cylinders for the period spanning October 2018-September 2019.
The Ministry has maintained that it has provided 8 crore deposit-free LPG connections to women belonging to poor families and that the target of 8 crore has already been achieved on September 7, 2019, seven months ahead of the target date. The maximum beneficiaries of the scheme are from under-privileged sections of the society and that implementation of PMUY has led to an increase in national LPG coverage to 96.5 per cent, according to the Ministry.
The total subsidy/under-recovery under sale of subsidised LPG cylinders to customers during the last three years has shown a surge under PMUY, going up from Rs 2,999 crore in 2016-17 to Rs 5,683 crore in 2018-19. The total subsidies on LPG cylinders, including both PMUY and DBTL schemes, has also gone up from Rs 15,904 crore in 2016-17 to Rs 37,222 crore in 2018-19.
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