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Non-subsidised LPG Costliest in 14 Months, Here's a Look at How Prices Changed in Past 6 Years

This is the sixth such hike since August last year and that effectively means, a household in Delhi will now have to pay at least Rs 283 more than what it had to pay just six months back to purchase a non-subsidised cylinder.

Fazil Khan | News18.com

Updated:February 15, 2020, 12:53 PM IST
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Non-subsidised LPG Costliest in 14 Months, Here's a Look at How Prices Changed in Past 6 Years
Representative image: Reuters

New Delhi: A day after the Delhi assembly poll results were announced, the Centre increased the price of unsubsidised domestic LPG cylinder by more than Rs 140, the steepest since January 2014. After the hike, prices were raised from Rs 714 to Rs 858.5 in Delhi, from Rs 747 to Rs 896 in Kolkata, from Rs 684.5 to Rs 829 in Mumbai, and from Rs 734 to Rs 881 in Chennai.

This is the sixth such hike since August last year and that effectively means, for instance, is that a household in Delhi will now have to pay at least Rs 283 more than what it had to pay just six months back to purchase a non-subsidised cylinder.

The latest hike also means that an unsubsidised domestic LPG cylinder is now the most expensive in at least 14 months.

News18.com takes a look at how the price of an LPG cylinder has changed over the last six years.

Apart from costs such as custom duties, ocean freight, bottling charges, dealer's commission, marketing costs, etc., retail price of a domestic LPG cylinder (14.2 kg) is directly proportional to the crude oil prices in the international market.

Hence, average price of a non-subsidised LPG cylinder in January 2014 under the erstwhile UPA government was Rs 1,252 at a time when crude oil prices peaked at over US dollar 100 per barrel. In fact, between April 2011 and March 2014, crude prices averaged at over US dollar 108 per barrel.

In May 2014, the Narendra Modi-led National Democratic Alliance government came to power at the centre.

In the international domain, crude prices remained over US dollar 100 per barrel till August that year, after which the prices plummeted significantly. So, for instance, crude prices in the Indian basket declined from US dollar 101 per barrel in August 2014 to as low as US dollar 28 per barrel in January 2016. This reflected in the prices of the LPG cylinder as well. The cost of the cylinder went from Rs 938 in August 2014 to Rs 671 in January 2016 and to a further low of Rs 497 per cylinder by September 2016.

After the fall that began early in the first term of the Modi government, crude prices averaged around US dollar 40-45 per barrel. Prices, however, started picking up in late 2016, averaging at US dollar 56 per barrel in 2017-18 and later at US dollar 69 per barrel in 2018-19 and as seen previously, the cost of the LPG cylinder started to swell too.

After many back to back hikes, the price of the unsubsidised cylinder breached the Rs 800-mark for the first time under the NDA government in September 2018 since it was first brought under Rs 800 in November 2014.

Crude prices in 2019-20 so far have averaged around US dollar 63 per barrel and the LPG prices have fluctuated in response to the change in crude prices. Incidentally, both, the crude oil prices in the international market as well as the price of the non-subsidised LPG cylinder, hit their lowest at US dollar 59.35 and Rs 578, respectively, in the month of August in the current fiscal.

Notably, the price of LPG cylinder is the average of Delhi, Kolkata, Mumbai, and Chennai. Crude prices are monthly averages.

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