- Why in news
- On 7 June 2026 the Petroleum Ministry said Indian households pay among the world's lowest cooking gas prices. It said the government absorbs the cost rise from the Hormuz disruption, with Ujjwala users paying an effective ₹642 per cylinder.
- What it is
- Pradhan Mantri Ujjwala Yojana (PMUY) was launched in 2016 to give LPG connections to poor households, mainly in the name of women, so they stop using firewood and other solid fuels. Beneficiaries get a targeted subsidy through direct benefit transfer into their bank accounts. The Ministry of Petroleum and Natural Gas runs it through the oil marketing companies.
- Ujjwala subsidy
- PMUY households get ₹300 per cylinder on the first four refills each year, which is ₹1,200 per beneficiary a year.
- Effective prices
- A PMUY beneficiary pays an effective ₹642 for a 14.2 kg cylinder, and the general consumer in Delhi pays ₹942.
- Under-recovery vs subsidy
- Under-recovery is the gap between the international cost and the regulated retail price. It is borne by the public sector marketing companies and partly compensated by the exchequer. It is separate from the Ujjwala subsidy.
- Cabinet compensation
- The Union Cabinet approved ₹30,000 crore compensation to the marketing companies for LPG under-recovery.
- Reach
- PMUY covers more than 10.58 crore connections, with the subsidy paid by direct benefit transfer.
- Import benchmark
- The landed cost of imported LPG tracks the Saudi Contract Price set by Saudi Aramco at the start of each month.
Don’t confuse with Under-recovery vs subsidy: Under-recovery is the loss of marketing companies from selling below cost, partly compensated by the exchequer. The Ujjwala subsidy is a direct ₹300 transfer to the beneficiary's bank account.
Don’t confuse with Domestic vs commercial LPG: The commercial cylinder price is revised monthly with the international benchmark. The domestic cylinder price is held back and modulated.
Schemes: 52 Prelims questions since 2013, 10 in Prelims 2026 alone. They test features, the period and who funds it. In Mains, 33 news-triggered questions, mostly GS3.
Why it matters
- Protects poor households from global price shocks and supports clean cooking fuel use.
- Shows energy security measures such as wider sourcing and higher domestic LPG output during the Hormuz disruption.
Problems
- Under-recovery burden on public sector oil companies and the exchequer is rising, at about ₹700 per domestic cylinder.
- Import dependence and exposure to the Strait of Hormuz, through which about 54% of India's LPG consumption was routed.
Way forward
- Shift gradually to piped natural gas and diversify LPG sourcing and domestic production.
- Keep targeted DBT and anti-diversion checks such as OTP-based delivery verification.
Put in your answer
Under-recovery data: Cumulative domestic LPG under-recovery reached ₹60,000 crore by the end of last financial year, up from ₹41,338 crore.
Supply response: Domestic LPG production was raised from about 32 TMT to about 52 TMT to offset constrained imports.
- 2015Mains GS3 · Q5How replacing price subsidy with DBT could change India's subsidy scenario.
- 2022Mains GS2 · Q8Comment on DBT scheme as progressive step, and its limitations.
- 2013Mains GS2 · Q13Comment on electronic cash transfer for welfare schemes reducing corruption and wastage.
UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
No practice question for this one; the card may still help an answer. Why: PMUY is a lasting scheme and the subsidy is a live topic. This release is mostly price comparison, so little new for statements. Schemes were 52 of 327 Prelims questions.
Worth revising until Prelims 2028: most news questions come within two years of the event.