India extends free LPG scheme by three months

India has extended by three months its disbursement of free LPG refills after several poor households failed to take advantage of the cooking fuel provided under a state-subsidised PMUY scheme, which was launched as part of a 1.7 trillion rupee ($22.6bn) stimulus package to counter the economic impact of the Covid-19 pandemic.

"Upon review of the scheme, it has been observed that a section of PMUY beneficiaries have yet to use the advance credited into their accounts to purchase the cylinder refill within the scheme period," the government said.

Beneficiaries under PMUY — which was expanded to provide LPG to 80mn households by 2022 — who have had the advanced credit transferred to their accounts now have until 30 September to take delivery of the free refills.

The government launched the scheme in April to provide one free 14.2kg cylinder each month until June, but many poor households instead used the money deposited into the accounts to buy other essential items such as food. Around Rs97bn rupees were transferred directly into the bank accounts of PMUY beneficiaries during April-June, with nearly 120mn 14.2kg bottles delivered.

The three-month extension will also help boost demand for and imports of LPG. India's LPG demand in May increased by 13pc from a year earlier amid a four-month lockdown to combat the Covid-19 pandemic. Demand reached 2.32mn t compared with 2.05mn t a year earlier, according to preliminary oil ministry data. India's LPG imports increased by just under 50pc on the year to 1.51mn t in May.

India has kept prices of non-subsidised LPG for July largely unchanged from June, after steep increases in diesel and gasoline prices led to protests. A non-subsidised 14.2kg LPG cylinder costs Rs594 in Delhi this month, stable from Rs593 in June.

The country's Covid-19 cases are continuing to surge, rising by 100,000 every five days. The total case count is nearing 800,000.

By S Dinakar