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Govt to tie up with MFIs for LPG refills

PMUY, launched in May 2016, set targets for the government's oil marketing companies to provide connections to 50 million families below the poverty line over three years

Shine Jacob  |  New Delhi 

Govt to tie up with MFIs for LPG refills

The (PMUY) is likely to get a new financing model, with (MFIs) brought in to encourage savings among consumers for refilling their cooking gas cylinders. “We are in talks with a few such organisations and experts in the sector to come up with a savings model, through which poor people can deposit a share of their money, depending on LPG (cooking gas) prices on a daily basis,” said an official. According to sources, the ministry of petroleum and natural gas is, among others, talking to Lucknow-based MicroSave, an international financial inclusion consultancy, which has advised the United Nations, International Finance Corporation and the Gates Foundation. PMUY, launched in May 2016, set targets for the government's oil marketing companies — Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPC) and Bharat Petroleum Corporation (BPC) — to provide connections to 50 million families below the poverty line over three years. With government support of Rs 1,600 per connection. The three have added 32 million consumers under the scheme. According to sources, based on a study between May 2016 and April 2017, nearly 80 per cent of Ujjwala consumers came back to the OMCs for a second refill, while 45 per cent had three or more refills in a year. To maintain regular connections with new consumers, to sensitise them about the benefits of using LPG, the OMCs had recently started an 'LPG Panchayat' in rural areas. The Union Cabinet is also likely to decide on a proposal for an extra Rs 4,800 crore to the scheme, to raise the target to 80 million people from the current 50 million by early 2018.

The 'clean energy' plan of petroleum minister Dharmendra Pradhan calls for 280-300 million LPG consumers by 2019. There were 140 million LPG connections when this government took charge in 2014. There are now 251.1 million domestic LPG consumers — 121.2 million of IOC, 64 million of BPC and 65.9 million of HPC. Another 30 million connections might mean Rs 30,000 crore of investment on LPG infrastructure; Pradhan recently said for every 10 million connections, India needed investment worth Rs 10,000 crore on this.

First Published: Sat, December 16 2017. 02:27 IST
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