State-owned oil marketing companies (OMCs) have said that the central government’s announcement on providing liquefied petroleum gas (LPG) connections to 50 million households below the poverty line (BPL) under Pradhan Mantri Ujjwala Yojana scheme in three years mean a lot of challenge. The Cabinet Committee on Economic Affairs has approved the scheme - Pradhan Mantri Ujjwala Yojana. It has been allocated Rs 8,000 crore.
The scheme would provide financial support of Rs 1,600 for each LPG connection. The identification of eligible families, as proposed in the Budget for 2016-17, will be in consultation with states. Further, the investments would be required on various fronts LPG import facilities, logistics and additional bottling. OMCs will have to make additional investments to ensure that the targets are met in three years.
Out of the three OMCs, Hindustan Petroleum Corporation (HPC) has said that it would be spending around Rs 2,000 crore in setting up an LPG import facility (Rs 500 crore) and seven to 10 more bottling units for Rs 700-1,000 crore. The company is looking for the land to build a new LPG bottling plant of 60 million tonnes (mt) per annum. Bharat Petroleum Corporation (BPC) plans to build an LPG import terminal at West Bengal’s Haldia, for Rs 800 crore. The company has acquired 35 acres for the purpose and plans to complete the project in three years. BPC has infrastructure in the western and southern regions but the problem will be in the eastern region. Indian Oil Corporation, the nation’s largest OMC, is constructing an LPG import facility of 600,000 tonnes per annum at Paradip, Odisha, for Rs 690 crore.