All Schemes for LPG Customers

Today, India has around 16.64 crore active consumers of Liquefied Petroleum Gas (LPG). Around 21 million tonnes of LPG is required for consumption per annum. This demand is expected to see a substantial growth over the coming years. In line with this need, the government has taken several steps to improve the overall infrastructure and distribution of LPG in the country.

Listed below are the schemes provided for the benefit of LPG consumers.

1. CSR Scheme for BPL Connections

As per this scheme, BPL families can receive a new LPG connection without having to pay the security deposit for a cylinder and a pressure regulator. However, they are required to bear the following expenses,

  • Installation or demonstration charges for the new connection.
  • Administrative charges and cost of DGCC.
  • Cost of gas stove and LPG rubber tube at the time of release of new LPG connection.
  • If the stove is not procured from the LPG distributer, it needs to be inspected. These inspection charges will be borne by the customer.
  • Price of LPG in the new cylinder.

All these charges should be paid to the concerned distributor.

2. Opting Out of LPG Subsidy

Every cylinder that is used by a consumer carries a subsidy of around Rs. 200. This amounts to a huge subsidy burden that deters the government from utilising these resources in other developmental activities. In an attempt to focus the LPG subsidy towards the needy, the government has launched the ‘Opt out of subsidy’ scheme. As per this scheme, the government motivates LPG consumers who can afford to pay the market price for LPG to surrender their subsidy.

Customers can opt-out from LPG subsidy through the website, or by submitting Form-5 to their distributors.

3. Regularising LPG Connections

This scheme is targeted at streamlining the possession and transfer of LPG connections.

  • For connection transfers, a written consent is needed from the registered customer for transfer to the person holding the equipment and SV.
  • The distributor verifies the submitted documents and settles the security deposit amount between the registered customer and holder of the equipment.
  • A fresh SV will be issued to the holder of the equipment.
  • For people holding equipment without any connecting documents, a security deposit at the prevailing rate is charged.
  • In case of death of the SV holder, the beneficiary shall be transferred the connection on submitting Death Certificate and Legal Heir Certificate/NOC.
  • Transfer of LPG connection within the family is possible if the registered member provides a written consent for the same.

4. Public Liability Insurance for LPG Accidents

PSU Oil Marketing Companies act as Principals and take Insurance policies for LPG accidents including Third Party Insurance Cover. These are Public Liability Policies and are not in the name of an individual customer.

  • The distributor does not collect any premium for the insurance policies from the customer.
  • The claim amount is remitted through the Oil Company to the beneficiary.
  • There are limits on the liability for compensation.

5. Portability

Under this provision, a customer can shift to an alternate distributor if he/she is dissatisfied with service. This is useful in keeping distributors competent and in providing improved service to customers.

  • Customers can transfer the connection through the website,
  • The approval of the parent distributor is not needed to initiate transfer. The customer can complete required documentation at the new distributorship within the specified time.
  • There shall be no transfer fee or additional security deposit for transfer of LPG connection under this scheme.
  • There is a commendable electronic tracking mechanism to ensure smooth processing of the transfer request.

6. PAHAL Schemes

The initial phase of the PAHAL scheme required the consumer to have an Aadhaar number to avail LPG subsidy. This has been reviewed comprehensively and a modified scheme has been launched recently. Once a customer joins the scheme and is ready to receive subsidy in his bank account, he is said to be Cash Transfer Compliant (CTC).

  • As per the modified approach, there are two methods by which LPG customers can receive subsidy.
    • Primary option - Aadhaar will remain the medium of cash transfer. The Aadhaar number is linked to the bank account and the LPG consumer number.
    • Secondary option - If the LPG consumer does not have an Aadhaar number, he can receive subsidy in his bank account irrespective of this. In this case, the consumer is required to produce his bank account information to the LPG distributor for updating the LPG database. He should also present his LPG consumer ID to his bank.
  • If LPG consumers were already CTC prior to the update in PAHAL, they need not take fresh action to receive subsidy.
  • As per this scheme, LPG cylinders will be sold to customers at Market Determined Price.
  • Customers who join PAHAL will be provided a one-time advance, and it will remain with the customer till termination of connection. At termination, the amount will be adjusted by the distributor.

7. The Pradhan Mantri Ujjwala Yojana

Prdhan Mantri Ujjwala Yojana is yet another welfare program that the Government of India had launched under the leadership of Prime Minister, Narendra Modi. Under this scheme, the government aimed to provide about 50 million LPG connections to women who fall below the poverty line in our country. Some of the highlights of this scheme are:

  • This scheme was launched on 1st May 2016.
  • About 8 thousand crore was invested to kickstart this scheme which will go on to benefit many people in the country.
  • This scheme aims to replace unclean cooking fuels which is used in rural India with clean and affordable LPG (Liquefied Petroleum Gas).

8. Give-Up LPG Subsidy

Give-up LPG subsidy” is one of the popular campaigns introduced by Prime Minister, Narendra Modi in India. Launched in the month of March 2015, the objective of this campaign was to motivate LPG users across the country to pay the market price of the LPG cylinder if they can afford it and surrender their LPG subsidy back to the government so that people below the poverty line can get access to it.

  • It is recorded that as of 23 April 2016, about 1 crore people (10 million people) in India voluntarily gave up their LPG subsidies.
  • These LPG subsidies are now redistributed by the government to the rural people in India for free.
  • Among the states that positively accepted this campaign, Karnataka, New Delhi, Tamil Nadu, Maharashtra, and Uttar Pradesh top the list.   


News about All Schemes for LPG Customers

  • DBT Only For LPG, Not Kerosene?

    The Direct Benefit Transfer (DBT) which has been implemented for LPG subsidy is not likely to be extended towards kerosene, according to sources.

    The government believes that extending this benefit towards kerosene will not be very beneficial given that very few people still opt for the subsidy and since there is not much of a gulf between the subsidized price and the market price.

    The diminishing number of people opting for kerosene subsidy will result in the cost of the project not being commensurate with savings.

    Officials stated that with rapid electrification and a growing percentage of the population opting for LPG, kerosene is falling out of favour. With the government looking to encourage the sale of more energy efficient and cleaner sources such as LPG, the unwillingness to bring kerosene under the DBT seems like a logical step.

    12 December 2016

  • Two Key Schemes Targeted At BPL and Women Launched in Jharkhand

    The central government launched a few more initiatives specifically targeting BPL families and women in particular recently. First of which is called the Pradhan Mantri Ujjwala Yojana (PMUY), which provides gas connection for women from BPL families in Ranchi.

    The launch event was launched by Jharkhand Chief Minister Raghubar Das as other dignitaries like Dharmendra Pradhan, Minister of State, Ministry of Petroleum and Natural Gas, was also part of the proceedings.

    Mr. Das, who spoke during the launch said that, this is a very interesting scheme as it helps BPL families, and women from those families in particular, to cook without smoke. This scheme aims at providing over 5 crore connections in just over three years.

    The Government of India Minister Mr. Pradhan also spoke at the event and lauded the state government's efforts for being the first state to introduce Direct Benefit Transfer in PDS Kerosene (DBTK), which would save subsidies of over Rs. 700 crore.

    20 October 2016

  • Details Regarding Implementation of Aadhaar-Based Direct Benefit Transfer Scheme

    March 31, 2018 has been set as the deadline for the complete rolling out of Aadhaar-enabled Direct Benefit Transfers for kerosene, food, and fertiliser subsidies, which together account for over 70% of the Government’s Rs.3 lakh crore budget for these welfare payouts. Through the DBT or Direct Benefit Transfer scheme, the Government has provided Rs.32,141 crore benefits in the first 5 months of the ongoing fiscal. This takes the total transfers through DBT to almost Rs.1.4 lakh crore. Most of these transfers have been regarding LPG subsidies and wage payments under the programme for jobs.

    Although DBT schemes are picking up gradually, there is a long way to go. This success would be dependent on integrating all subsidies under kerosene, food and fertiliser into this scheme. Previously, the Government had said that subsidies other than the above, would be linked to DBT before March 31, 2017. These schemes include crop insurance, scholarship schemes and other transfers. DBT pilots are underway for food subsidies in many parts of the country since the previous year and the Government rolled pilot on fertiliser subsidy in 8 districts.

    The transfers being done every month through DBT scheme have been pretty much uneven due to accounting flexibilities, delayed disbursements and seasonal nature of demands. However, the government has been keen to use the DBt platform to plug leakages and has already put 74 schemes into this platform.

    12 October 2016

  • Losses on Subsidized Sales of Petroleum Products to Drop by 30 Percent

    Analysts expect a significant drop of 30 % in the Gross Under-Recoveries (GUR) of oil companies in the current fiscal year. It will fall to 19,100 crore from the previous year’s losses which was calculated as 27,570 crores. The assessment of loss reduction is based chiefly on the rupee-dollar exchange rate and the average Indian basket crude oil price per barrel. Government schemes like Direct Benefit Transfer, ‘Give Up LPG subsidy’ etc. are some of the factors contributing to the reduction in GURs. The government has also notified oil companies to increase the prices of subsidized kerosene by 25 paise on a regular basis, which will add to the overall reduction in its GURs by the next financial year.

    29 September 2016

  • Government to Release Free Cooking Gas Connections in J&K

    Centre launches a scheme on Wednesday to provide free cooking gas connections to BPL families in Jammu and Kashmir. It was inaugurated by the Union Petroleum Minister Dharmendra Pradhan, who announced that the government will be releasing one lakh LPG connections in the next 15 days. After coming to power, the BJP government has provided 2 lakh connections in J & K in just 2 years which stands in contrast to the 5 lakh connections released by the previous governments in 8 years, stated the Minister. He also said that the government is taking steps to enhance capacity of the bottling plant in Leh and also has plans to install bottling plants in Kargil.

    29 September 2016

  • J & K Govt to Roll Out 35 Lakh LPG Connections

    In a move to provide BPL families with free LPG connections, the Government of Jammu and Kashmir announced the launch of Pradhan Mantri Ujjwal Yojna (PMUY) in the state. The scheme which aims to provide five crore free LPG connections in the next three years, was originally launched in May 2016 by Prime Minister Narendra Modi.

    Jammu and Kashmir has set a target figure of 35 lakh connections, out of which one lakh connections will be provided by mid October. Making clean and smoke free cooking gas available to BPL families is the prime objective of this scheme, and it expects to cover the entire state in a 2 year period.

    28 September 2016

  • Mandatory To Submit Aadhaar Copy To Avail Subsidy

    It has become mandatory now for the Liquefied Petroleum Gas(LPG) consumers to submit their aadhaar card numbers in order to avail subsidy. One of the senior officials from an oil company has announced that the consumers will have to submit their Aadhaar card numbers before 30th September to get subsidy of three months together. According to a recent report, only 1.28 crores of consumers out of 1.67 crores have submitted their Aadhar numbers. The government recently announced that it is now possible for a newborn to enroll for an Aadhaar card.

    22 September 2016

  • Direct Benefit Transfer is Being Expanded By the Government to More Schemes

    DBT or direct benefit transfer has been a success and the Government has planned that it would double the scheme number under direct benefit transfer. Subsidy will be paid on food, fertiliser and kerosene directly through the bank accounts of the beneficiaries.

    Ashok Lavasa, Finance Secretary stated that subsidies and benefits in 74 schemes of seventeen government departments are paid to the beneficiaries under direct benefit transfer. He added that the government has implemented 30% of recommendations of the commission dealing with expense management. It was set up to bring in reforms to the fiscal deficit and subsidy regime.

    18 September 2016

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