NEW DELHI: In a significant development, Hardeep Singh Puri, the Minister of Petroleum and Natural Gas, announced on August 30th that the central government will absorb the cost associated with the anticipated Rs. 200 reduction in the price of household LPG cylinders. This move is set to alleviate oil marketing companies from incurring a substantial projected loss of Rs. 7,500 crore.

Timed as a pre-Raksha Bandhan gesture for women, the Union Cabinet took a decisive step on Tuesday by slashing the price of a 14.2-kilogram LPG cooking gas cylinder by Rs. 200. This decision emerges against a backdrop of mounting criticism directed at the government's management of escalating inflation rates.

In a strategic bid to counter the impact of surging domestic consumer inflation, the Union Cabinet disclosed its intention to lower LPG prices on August 29. Initially met with skepticism from oil marketing companies (OMCs), the government's decision was forecasted to impose a significant financial burden of nearly Rs. 7,500 crore.

Minister Puri underscored the historical ambiguity surrounding accountability for the financial repercussions of energy price fluctuations. He advocated for a collaborative effort between the central government and OMCs to safeguard the economic well-being of the common citizens.

Commending the Narendra Modi-led administration, Minister Puri praised the imperative reduction in LPG cylinder prices, an action that has garnered widespread public acclaim. He further lauded the government's commendable strides in progressively expanding the reach of home LPG connections.

Puri articulated, "Previously, approximately 45 percent of the nation's population remained excluded from the LPG cylinder network due to supply chain challenges and the presence of black markets. In 2014, domestic LPG connections numbered 140 million, a figure that has now surged to 320 million." He emphasized the current availability of domestic cooking gas cylinders across every corner of the country.

The direct reduction of Rs. 200 stands to benefit both Ujjwala and non-Ujjwala customers, effectively shielding them from prevailing retail inflation.

Expanding on the performance of OMCs, Minister Puri remarked, "During the first quarter of fiscal year 2023, OMCs exhibited robust performance, a trend expected to persist into the second quarter. Despite initial setbacks, their resurgence, supported by government intervention, served as a bulwark, insulating the national economy and consumer landscape from various macroeconomic shocks."

Against the backdrop of Western sanctions following Russia's 2022 incursion into Ukraine, India has secured reduced-price crude oil imports from Russia, now the nation's leading commodity exporter. As the world's third-largest importer and consumer of oil, India relies on imports for over 80 percent of its oil consumption.

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