LPG price hiked by Rs 50/cylinder, up 26% from year ago

Domestic liquefied petroleum gas (LPG) cylinder, used by millions of households for cooking, is now 26% costlier than a year ago. This is due to a Rs 50 hike effective July 6 announced by the sate-run oil marketing companies (OMCs) for a 14.2 kg non-subsidised LPG cylinder, taking its price to Rs 1,053 a unit in the national capital.

According to the Indian Oil Corporation (IOC), the price for the same cylinder, on July 1 last year, was Rs 834.5 in the national capital.

Apart from IOC, Hindustan Petroleum (HPCL) and Bharat Petroleum (BPCL) mostly cater to the domestic market collectively. IOC’s rates are considered industry benchmark. India’s LPG coverage, calculated by PSU OMCs based upon the active LPG domestic connections and the estimated number of households, stood at 99.8% as on April 1 this year.

The hike, for the seventh time in the last one year, will have a direct impact on an a little over 308 million active consumers, as on June 1, who use LPG cylinders for cooking. A 14.2 kg non-subsidised 14.2 kg LPG cylinder will now cost Rs 1,079 in Kolkata, Rs 1,052.5 in Mumbai and Rs 1,068.5 in Chennai.

Since levies and transportation costs vary from one region to other, the price of LPG cylinders also varies. India imports more than 55% of its LPG requirement.

The price of LPG cylinder for household cooking has been on the rise since June last year. From Rs 809 a cylinder, the price was raised to Rs 834.5 on July 1. It was raised further to 859.5 on August 17 and again to Rs 884.5 on September 1 and yet again to Rs 899.5 on October 6.

For the first time in the current year, the price of LPG cylinder was raised on March 22 by Rs 50 to Rs 949.5 a cylinder (in Delhi). In May the price was upwardly revised twice by Rs 50 on May 7 and by Rs 3.5 per cylinder on May 19 – the last one was for revising distributors’ commission.

Since June 2020, the government hasn’t been depositing the subsidy on LPG or cooking gas in the bank accounts of target beneficiaries. Originally, non-subsidised cooking gas was the one that consumers used to buy after exhausting their quota of 12 cylinders at subsidised or below-market rates.

Meanwhile, the OMCs have further reduced the price for commercial LPG cylinders (19 kg) by Rs 8.5 per unit following a hefty Rs 198 per cylinder reduction to Rs 2,021 per cylinder effected from July 1.

Following the latest cut, a 19 kg LPG cylinder meant for commercial use in Delhi will come down to Rs 2012.5 a cylinder in Delhi.