India Extends LPG Promotion

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Prime Minister Narendra Modi's government has extended a scheme to promote the use of liquefied petroleum gas (LPG) to an additional 10 million poor households in India, where it is widely used for cooking meals. The move could boost imports of LPG as India already imports more than half of what it consumes, primarily from the Middle East (IOD Apr.8'20). The scheme was originally launched in 2016. It provided free LPG stoves and a free first cylinder of LPG to 80 million poor households to encourage them to switch from cooking with biomass, which produces smoke that can cause breathing problems. Subsequent cylinders were offered at subsidized rates. In the financial year that ended Mar. 31, India's LPG consumption grew by 4.8% to 877,000 b/d, as the government provided three free LPG cylinders to poor families to offset the decline in their incomes caused by the Covid-19 pandemic. However, the government also abolished all subsidies for subsequent LPG cylinders, which led some households to stop using LPG and go back to burning biomass in their stoves, raising doubts about the long-term success of Modi's scheme.

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