LPG cylinder subsidy in bank accounts from June

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NEW DELHI, May 15: The Union government is set to start its switchover to direct benefit transfer mode (DBT) to pay subsidies on cooking gas cylinders from the next month itself, beginning with Tumkur and Mysore in Karnataka and 18 other districts across the country.

Petroleum Minister M Veerappa Moily on Wednesday said 76 lakh consumers in 20 districts in eight states and two Union Territories would start receiving subsidies for liquefied petroleum gas cylinders directly to their bank accounts beginning from June 1.

After the first phase rollout in the 20 districts, the government would review the switchover and gradually spread the coverage of direct benefit transfer across the country, he added.

“The direct benefit transfer is aimed at curbing lekage of subsidies that the government provides on cooking gas cylinders and preventing black-marketing,” said Moily. The government is expecting an annual saving of Rs 8,000 crore to Rs 10,000 crore in LPG subsidy after the switchover is completed all over the country.

The process

After the switchover to the DBT mode, the LPG consumers in the 20 districts would have to buy cylinders at market price, which would be almost double the subsidised rates. The excess amount they would be paying however would be refunded as the government subsidy would be deposited directly to their bank accounts.  The consumers will have to have Aadhaar numbers to get the subsidy on their cooking gas cylinders through the DBT mode.

The government has advised the consumers in the 20 districts to immediately get their Aadhaar cards issued and share the Aadhaar numbers with the LPG distributors and the banks where they have their savings accounts.

The 20 districts the government selected for the first phase switchover to the DBT mode for LPG subsidy payout were the ones where almost 89 per cent of the population had received Aadhaar cards, 52 per cent had provided their Aadhaar numbers to their LPG distributors and 15 per cent had linked their Aadhaar numbers with their bank accounts.


The government, however, decided that the consumers, who had not received the Aadhaar cards or had not provided their Aadhaar numbers to their LPG distributors and the banks would get three months time to complete the formalities. The existing mode of paying subsidies on cooking gas cylinders would not be discontinued in the 20 districts till August 31.

“After this period, all consumers who have not completed the formality will get LPG cylinders at market price, without any subsidy, till they complete the same,” the Ministry of Petroleum stated. The consumers can visit the websites of the oil marketing companies to check whether their Aadhaar numbers have been linked to their LPG consumer numbers and the bank accounts.

“All Aadhaar-linked domestic LPG consumers will get an advance in their bank account as soon as they book the first subsidised cylinder even before delivery. This is to reduce their financial burden when they purchase the first LPG cylinder after launch of scheme at market rate,” the Ministry of Petroleum stated. “As soon as the first cylinder is delivered to such consumers, subsidy eligible on date of delivery will again get credited in the bank account, which will then be available for the purchase of the next cylinder at market rate. Thus, subsidy eligible on each such domestic cylinder, up to the cap of nine cylinders per year will be directly transferred to the Aadhaar enabled bank account of the consumer,” the Ministry stated.

Five districts of Andhra Pradesh, four in Himachal Pradesh, two each in Kerala, Karnataka and Madhya Pradesh, one each in Maharashtra, Punjab, Goa Daman and Diu and Goa are among the 20 districts selected for the switchover in the first phase.

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