Subsidised LPG price hiked by Rs 35.55 per cylinder in 5 months: Oil Minister Pradhan

The price of subsidised cooking gas (LPG) has been hiked by Rs 35.55 per cylinder in the last five months, Oil Minister Dharmendra Pradhan said. As per government policy, LPG all over the country is available only at market price. However, households are entitled to buying 12 cylinders of 14.2-kg each at a subsidised rate in a year.

The government transfers the subsidy amount directly into the bank accounts which the beneficiaries use to buy LPG at the market price. The subsidised LPG price has gone up by Rs 35.55 per cylinder since October 2019.

In a written reply to a question in the Rajya Sabha, Pradhan said domestic subsidised LPG in Delhi was priced at Rs 538.95 per cylinder on October 1, 2019, and this month it costs Rs 574.50. He did not give any reason for the price increase.

While non-subsidised or market priced LPG has varied from month to month based on benchmark international rates, subsidised LPG prices have been raised every month by Rs 4 per cylinder plus taxes. These rates, however, are no longer published by the oil market companies.

To the question of whether state-owned oil marketing companies had stopped publishing subsidised gas prices, he said the price of non-subsidised domestic LPG is available at the websites of oil companies.

In reply to another question, Pradhan said non-subsidised LPG cylinder costs Rs 805.50. Household consumers are getting a subsidy of Rs 231 per 14.2-kg cylinder, he said. So, a household buys LPG at Rs 805.50 per cylinder. After accounting for Rs 231 that he or she gets as government subsidy, the payout is Rs 574.50.

“The prices of petroleum products in the country are linked to the price of the respective products in the international market. However, the Government continues to modulate the effective price to consumers for subsidized domestic LPG and the consumers get the product at the subsidised rate.

“The subsidy on subsidized domestic LPG increase/ decrease with the increase/ decrease in the product price in the international market and decision of Government on subsidy,” he said. There are over 26 crore customers of subsidised LPG in the country. These include 8 crore poor women who were given free connections under the Pradhan Mantri Ujjwala Yojna.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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