Home >Industry >Energy >Govt may raise LPG connections target to 20 million for FY17
Increasing the LPG connections target could mean an additional fund allocation of about Rs800 crore. Photo: Ramesh Pathania/Mint
Increasing the LPG connections target could mean an additional fund allocation of about Rs800 crore. Photo: Ramesh Pathania/Mint

Govt may raise LPG connections target to 20 million for FY17

Govt has indicated that LPG connection targets for this FY17 could be raised by 33%

Mumbai: Buoyed by the success of Pradhan Mantri Ujjwala Yojana, the bottled cooking gas distribution programme, the government has indicated that targets for this fiscal could be raised by 33%, said two officials from the oil marketing companies.

This means that the target for new cooking gas connections this fiscal would go up to 20 million from 15 million.

“There has been an indication from the government that the number of LPG (liquified petroleum gas) cylinder connections for this fiscal could go up by 50 lakh additional connections as the Ujjwala scheme has been a huge hit," a senior official from the LPG division of one of the state-run fuel retailers said on condition of anonymity.

The country’s state-run fuel retailers are Indian Oil Corp. Ltd (IOCL), Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL).

This would mean an additional fund allocation to the tune of Rs800 crore, he added. The government has already allocated Rs2,000 crore for the implementation of Ujjwala Yojana for the financial year 2016-17.

A total budgetary allocation of Rs8,000 crore has been made for the implementation of the scheme over three years. The scheme will be implemented using the money saved in LPG subsidy through the “Give-it-Up" campaign.

The Pradhan Mantri Ujjwala Yojana was started by the government in May. Under the scheme, the government aims to provide cooking gas connections to poor households. The scheme aims to replace unclean cooking fuels used mostly in rural India with clean LPG.

“The rural segment has responded well to the scheme. This is beyond our expectation. Looking at the demand, the government plans to up its target," said the second senior official from another OMC’s LPG division.

Petroleum minister Dharmendra Pradhan said on 27 November that 11 million cooking gas connections had been released under the Ujjwala programme.

IOCL said in an emailed response that it alone had released 5.89 million connections across India until 14 December under the scheme. HPCL and BPCL did not reply to an emailed questionnaire.

Under the Ujjwala scheme, the government provides LPG connections to poor women along with financial assistance over a period of three years. Eligible families are identified through the Socio-Economic Caste Census 2011 data.

Mint had reported in October that the scheme could meet its target before the stipulated time.

The scheme provides financial support of Rs1600 for each cooking gas connection to eligible households. The connections are given in the name of the women heads of households. The government also provides an equated monthly instalment facility for meeting the cost of stove and refills.

The identification of eligible families, as proposed in the Budget for 2016-17, is to be done in consultation with states.

The three oil marketing companies are planning to set up a 1,450-km pipeline to service central India to meet the increasing demand for cooking gas.

The pipeline will emerge at Kandla port or Mundra port, both in Gujarat, and run via Bhopal, Kanpur and Lucknow to terminate at Gorakhpur in Uttar Pradesh. The total cost of the pipeline, to be set up under a joint venture in the next three-four years, will be around Rs5,000 crore.

Mint had in October reported that BPCL is planning to build a 2-million-tonne-per annum LPG import terminal on the west coast to import LPG. The terminal will be set up at a cost of 1000 crore.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Click here to read the Mint ePaperMint is now on Telegram. Join Mint channel in your Telegram and stay updated with the latest business news.

Edit Profile
My Reads Redeem a Gift Card Logout