• The Pradhan Mantri Ujjwala Yojana (PMUY) has so far provided over 6.31 crore free LPG connections since its launch, and now the target has been upped to 8 crore connections by March 2020.
• This has helped the country achieve a LPG coverage of close to 90 per cent, but this has also led to a rapid increase in LPG imports.
• With estimated imports of above 12 million metric tonnes in the financial year 2018-19, India stands as world’s second largest importer of LPG, after China.
Achieve the feet
• The country’s LPG imports have registered a remarkable trend in the last five years, growing at a healthy CAGR of 12.5 per cent, surpassing import volumes of Japan in the financial year 2017.
• For the April to December period in the current financial year, India had imported 9.47 million mt of LPG, and in the last financial year, 11.38 million mt, registering a rapid rise from 8.9 million mt in 2015-16.
• While India has excess refining capacity, and has no need for import of any of the transportation fuels, LPG production is short of demand and met through majority imports.
• This demand is projected to further rise 34 per cent by 2025, oil secretary M M Kutty said. He said the active LPG consumers have grown at a CAGR of 15 per cent from 2014-15 to 2017-18—in absolute numbers 14.8 crore to 22.4 crore.
• As per (oil) ministry’s projections and forecasts, LPG consumption is expected to grow to 30.3 million tonnes by 2025 and 40.6 million tonnes by 2040.
• With only kerosene and LPG have subsidized categories, and LPG being the growing segment, government’s subsidy burden can increase especially in case of higher global oil prices.
• For the current financial year the government has estimated a fuel subsidy of 24,833 crore as per the revised estimates, and budgeted for 37,478 crore for the next fiscal.
Mains Paper 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.
Prelims level: WLPGA, Asia LPG Summit
Mains level: PMUY , its prospects and challenges.