Looking for an effective alternative to LPG

News: The government spent more than Rs 12,000 crore on near-universal access to LPG connections, Still, about six lakh people die every year due to air pollution in Indian kitchens.

What are the problems faced by the people?

Over half of rural India continues to primarily rely on burning solid fuels for cooking. It increases the likelihood of illnesses, including ischemic heart disease, cataracts, and lung cancer. Recent evidence also shows that it increases the risk of Covid-19 infection.

Rising domestic LPG prices, removal of subsidies, growing retail inflation, and unending distress owing to the pandemic have squeezed the pockets of low and middle-income households. Thus, it is difficult to shift to LPG.

What are the other alternatives?

Electricity: It may not be an immediately viable alternative because of two major concerns.

First, households that got electricity connections under rural electrification schemes have a maximum connected load of 500W. However, induction stoves are rated more than 1500W.  If homes move to electric cooking, there will be issues of supply due to distribution transformer failures. As households would cook at roughly the same time, it could lead to further stress on the electricity distribution system.

Second, the Requirements of a rural household are usually met within 100 units/month, which gets covered by concessional tariffs. However, beyond 100 units, consumers have to pay about Rs 7-8 per unit used. Induction-based cooking alone would drive up the monthly electric bill by at least Rs 500-600, which would be unaffordable for many poor households.

Piped Natural Gas: It could be an alternative to LPG in densely populated urban areas in the coming years. But it is not designed to supplement the cooking needs of rural India because of network expansion costs. Even if this is addressed, India has limited reserves of natural gas. Therefore, large-scale usage of PNG would require imports, which would make PNG unaffordable.

What is the government doing?

Since the launch of Ujjwala Yojana in 2016, there have been significant efforts in increasing the domestic LPG distribution network. The government has added 12 new bottling plants (with an added capacity of 6,200 thousand metric tons per annum) and about 9,000 new distributors.

However, budgetary allocations to LPG have been rapidly shrinking in the recent past. It has come down from about Rs 31,400 crore in 2018-19 to only Rs 4,000 crore in the budget for 2022-23.

What should be the way forward?

A targeted approach backed by financial and institutional support is required in order to address the shortage of LPG problems. Government should also resume LPG subsidies and rationalize them. For example, subsidies could be provided only to consumers with low consumption.

Also, revising LPG prices could be limited to twice a year to provide price certainty in the context of volatile oil markets.

Source: This post is based on the article “Looking for an effective alternative to LPG” published in the Indian Express on 4th March 2022.