Liquified Petroleum Gas (LPG) price has been hiked by Rs 25 again, making this the second month in a row where oil companies have increased the price of cooking gas. With the new changes, the price of LPG cylinders between January 1 and August 17 will have climbed by Rs 165 per cylinder. The new changes were set to take effect from August 17 onwards. The latest price hike has a 14.2-kilogram domestic cylinder costing around Rs 859.50 in the nation’s capital, Delhi. Citizens in the city of Mumbai have to also shell out Rs 859.50 per cylinder of non-subsidised cooking gas. In Kolkata, the price of an LPG cylinder stands at Rs 886.50. LPG cylinders in the city of Chennai stand at Rs 875.50 per LPG cylinder. Out of all the four metros mentioned, Kolkata has the highest price.
The price of domestic cooking gas cylinders was last hiked on July 1, according to the Indian Oil website. The 19-kilogram commercial LPG cylinder pricing was hiked on August 1; however, the price of the domestic gas cylinders was not changed at that point.
The LPG price in India can be calculated based on the import parity price (IPP). The IPP is based on the LPG price in the international market given that a country imports the fuel. Saudi Aramco’s LPG price, includes the FOB (free on board) price, ocean freight, insurance, customs duties, port dues and so on. This price is quoted in dollars and then converted to Rupees. This is then added on top of the in-country prices such as GST, excise duty, freight charges and so on. The price for LPG is reset every month in India on this basis. LPG cylinder prices change from one state to another depending on the state-wise taxes, much like petrol and diesel.
Keeping this in mind, if international LPG prices increase or if the rupee weakens at any point, this would likely translate to higher LPG retail rates in India. The international LPG price tends to move with the price of crude oil. Crude oil price dropped for the fifth day on Wednesday as investors remained concerned over the rising levels of Covid-19 across the globe. Similarly, oil benchmarks have also been under tremendous pressure from the rising Delta variant cases. The global benchmark had lost 11 per cent in the last 13 trading days.
There is also the factor of subsidies to consider that is provided by the Central government. The government provides these subsidies to customers of certain states to offset the heavy freight charges that they face. Under this scheme, each household is eligible for 12 cylinders a year and this subsidy amount changes every month. Families with an annual income of less than Rs 10 lakh are eligible for subsidy facility. Customers need to link the bank accounts with their Aadhaar Card to get the subsidy. The amount of the subsidy provided by the government varies from month to month.
All three major PSU suppliers — Indian Oil, Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) — charge nearly the same price across the country. High LPG price will pinch you as you have to shell more on it, starting from August.
Petrol and diesel prices in the country are at all-time high. A litre of petrol is being sold at Rs 101.84 in Delhi. In Mumbai, the petrol prices stood unchanged at ₹ 107.83 per litre, highest among the four metro cities. However, the price has remained unchanged from early July. Diesel price has been reduced by 40 paise in the last two days.