India has become the second-largest domestic LPG (liquefied petroleum gas) consumer in the world due to the Narendra Modi government’s rapid rollout of clean fuel plan for poor households and fuel subsidy reforms.
LPG consumption by households has reached 19 million tonne, registering an annual growth rate of 10%. Consumption is expected to rise 20 million tonne, backed by expanding consumer base in urban areas and rapid rollout of the ‘Ujjwala’ scheme for providing LPG connections free of cost to five crore poor households by 2019.
The Ujjwala scheme has turned India into an example for energy experts from other emerging economies still struggling to provide clean fuel to their rural folks. No wonder the World LPG Association (WLPGA) — so far focused on developed economies — has chosen to hold its Asia summit in Delhi, bringing together 600 experts from 35 countries who want to learn from Ujjwala.
Barely nine months after being launched by the PM in May 2016, the scheme has covered 1.6 crore poor households, topping the target set for the entire 2016-17 financial year on the back of a massive rural outreach push. “It simply beats me how they achieved this,” WLPGA Yagiz Eyuboglu told a curtain-raiser session on Monday in a compliment to oil minister Dharmendra Pradhan.
“When we assumed office, we had a system of misdirected subsidies, rich and upper-middle class were entitled to LPG subsidies. There were many duplicate connections and the subsidized LPG was diverted to commercial and industrial segments. As a result poorest of the poor never had access to LPG. In 2014, almost half of Indian households didn’t have LPG connections. We took it as a challenge and decide to change the LPG landscape in India,” Pradhan told the session, giving an insight into the government’s thinking behind the reforms.
Pradhan said reforms in the subsidy mechanism — elimination of ghost consumers and direct subsidy transfer into bank accounts — saved an estimated Rs 21,000 crore, or $3.2 billion, in the two years of the Modi government. During this time, he said, Rs 40,000 crore, or $6.5 billion, in subsidy has been transferred directly to bank accounts of consumers.
Ujjwala has raised the number of Scheduled Caste and Scheduled Tribe households with LPG connection to 35% of the total LPG coverage in the country. It has raised national the LPG coverage from 61% as of January this year to 70% as of December 1. India is home to more than 24 crore households, of which about 10 crore still do not have access to LPG as cooking fuel and have to rely on firewood, coal, dung cakes as primary fuel for cooking.
Ujjwala also aims at improving health of women folk in rural households, who still depend on firewood, coal, dung cakes as cooking fuel. According to a World Health Organisation report, smoke from such fuels inhaled by women is equivalent to burning 400 cigarettes in an hour and causes several respitory and other diseases.
In addition, women and children have to go through the drudgery of collecting firewood. The idea is that after getting a LPG connection, there would be no need for the women to collect firewood or dung and they can spend that time more productively. Nelson Agholor Authentic JerseyShare This