Government Extends ₹300 LPG Subsidy for PMUY Households in FY 2025-26
Kranthi Shekar - FEB 20, 2026
New Delhi, November 22, 2025 - In a major policy move, the Union Cabinet has approved a continued subsidy of ₹300 per 14.2-kg LPG cylinder for beneficiaries under the Pradhan Mantri Ujjwala Yojana (PMUY) for the financial year 2025–26.
Under the decision, each eligible household can claim the subsidy for up to nine refills in a year, with a proportionate rate applied to smaller (5 kg) cylinders. The total budgetary impact for this measure is set at ₹12,000 crore for FY 2025-26.
As of July 1, 2025, about 10.33 crore PMUY connections are active nationwide, making this subsidy widely relevant.
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Why the Subsidy Matters
Protection Against Price Fluctuations: India imports around 60% of its LPG requirement. The subsidy is a targeted effort to shield low-income PMUY consumers from global LPG price volatility.
Encouraging Clean Cooking: By lowering the effective cost of LPG, the government aims to sustain and increase the use of clean fuel among poorer households, helping reduce reliance on traditional, polluting cooking fuels.
Financial Backing for OMCs: To offset losses incurred by oil marketing companies (OMCs) supplying LPG at subsidized rates, the government has approved ₹30,000 crore in compensation. The funds will be disbursed in 12 tranches to three state-run OMCs: Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum.
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Scheme Background & Impact
PMUY was launched in May 2016 to provide deposit-free LPG connections to adult women from economically weaker households.
Under the Ujjwala 2.0 model, beneficiaries also get a free stove and the first refill at no cost.
The ₹300 subsidy was introduced earlier as well: it replaced a previous ₹200 rate.
According to government data, average LPG consumption per PMUY household has been improving: from about 3 refills/year in 2019-20, to 3.68 in 2022-23, and reaching around 4.47 in FY 2024-25.
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Challenges & Considerations
1. Sustainability for OMCs: Though subsidized, continuous high global LPG prices could stress OMC finances. The ₹30,000-crore package helps but long-term viability remains a factor.
2. Targeting Accuracy: The subsidy is limited to PMUY beneficiaries, so not all LPG users will benefit.
3. Implementation Risk: Effective delivery depends on correct identification of beneficiaries, and maintaining the linkage of bank accounts, Aadhaar, and KYC to ensure subsidy reaches eligible households.
