Oil and Gas in India
The LPG Subsidy and Ujjwala
How India subsidises cooking gas, how the Ujjwala scheme gave free connections to poor households, and why refill rates remained low.
Many Indian households cook with LPG (liquefied petroleum gas).
Subsidy history
- LPG was long subsidised.
- From 2014-15, subsidies were paid directly into bank accounts under PAHAL, reducing diversion.
Give It Up
In 2015, the Give It Up campaign asked better-off households to give up their subsidy; over 1 crore did.
Ujjwala
- Pradhan Mantri Ujjwala Yojana, launched in 2016, gave free LPG connections to poor women.
- Over 10 crore connections were provided.
Refill problem
- Many poor households didn’t refill cylinders often, due to high costs, and went back to firewood.
- The government added a refill subsidy for Ujjwala households.
Import dependence
India imports a large share of its LPG, mostly from the Gulf.
Economic view
Access isn’t enough; ongoing costs determine use.
The empty cylinder
A Ujjwala household in rural Bihar uses its cylinder for special occasions but cooks daily with firewood because refills are expensive.
Thinking giving connections ensures clean cooking
Refill costs limit ongoing use.
Key takeaways
- LPG subsidies moved to direct bank transfers.
- Ujjwala gave over 10 crore free connections.
- Many poor households refilled rarely.
- India imports much of its LPG.
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