LPG consumers grow by leaps and bounds

Eyeing gains

Commercial Liquified Petroleum Gas (LPG) customers have tripled from 2009, domestic LPG consumers doubled from 2015 and Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries have quadrupled from 2017 according to latest data compiled by the Petroleum Planning and Analysis cell this year. After the latest assessment, there were 32.5 lakh non-domestic or commercial LPG consumers and 8.01 crore PMUY beneficiaries out of the total 28.13 crore LPG connections in the country.

LPG dominance

This re-establishes that LPG is still, and maybe for a long time will be, the predominant cooking fuel of India. A fast-emerging competitor in urban backdrops, piped natural gas (PNG), just has 62.5 lakh consumers in the country. The Centre’s own growth target for PNG is just 5 crores, which significantly pales in comparison to the massive LPG consumer base that now covers 98 per cent of the country.

With the recent increases in LPG price, the government now eyes a windfall gain because of higher sales accrued from these new consumers in the domestic and commercial categories. For the PMUY category, public sector undertaking Oil Marketing Companies have transferred ₹ 9,670.41 crore to buy LPG refills. As a result of this, in the five months from April to August 2020, there have been 13 crore LPG refills being issued to PMUY beneficiaries, suggesting that most have opted for 2 cylinders in this period.

This is a significant uptick from the average refill consumption of PMUY beneficiaries for the year 2019-2020 that stood at 3.01 cylinder in the entire year.

For other non-PMUY consumers that make up over 70 per cent of all LPG consumers, there is no subsidy support from the government at the present prices. So, oil companies tend to make profits and the government gains through a 5 per cent GST on cooking gas.

It is to be noted that in addition to the subsidy saving because of nil subsidy on the present price of cooking gas, the government also rakes in big moolah through excise collections on petrol, diesel and aviation fuel.

In response to queries in the Lok Sabha, the Finance Ministry said that excise collections during fiscal 2019-2020 stood at ₹ 83,219 crore from petrol and ₹ 1.32-lakh crore from diesel.