PTI
New Delhi
Domestic cooking gas liquefied petroleum gas (LPG) price was hiked on Saturday by a steep Rs 60 per cylinder, the second increase in rate in less than a year, as the spike in global energy rates following the West Asia crisis weighed on the world’s third largest energy consumer.
Top government sources, however, were quick to state that an increase in petrol and diesel prices is not in the offing, as state-owned oil firms have enough financial muscle to absorb the warranted increase.
Non-subsidised LPG – the one that common households use in kitchens – will now cost Rs 913 per 14.2-kg cylinder in Delhi as against Rs 853 previously, according to the Indian Oil Corporation (IOC) website.
Ujjwala Yojana beneficiaries – the over 10 crore poor who have got free LPG connections since 2016 – will also have to bear the same amount of price increase. They will now pay Rs 613 per 14.2 kg cylinder after accounting for a subsidy of Rs 300 per bottle they get for up to 12 refills in a year.
Top government sources said the increase was necessitated because of a spike in global energy prices. Despite the increase, the price is less than the Rs 1,050 per 14.2-kg cylinder rate required to breakeven at cost.
They said considering an average consumption of 4-5 cylinders per year per household, the increase translates to 80 paisa per day for a family of four or just 20 paisa per person.
Even at the increased prices, LPG in India is cheaper than most countries in the world, they said adding cooking costs Rs 1,207 per bottle in Katmandhu, Rs 1,241 in Sri Lanka and Rs 1,046 in Pakistan.
Sources ruled out any immediate increase in petrol and diesel price, as three fuel marketing companies – Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) with bumper profits in earlier this year – had enough financial muscle to absorb such impact.
Retail petrol and diesel prices have been on a freeze since April 2022, with fuel retailers absorbing losses when crude prices are high and making profits when rates are low. The LPG price rise of Saturday is the second increase in rate in 11 months. The price was last hiked by Rs 50 in April last year.
Alongside, the price of commercial LPG – the one used by establishments such as hotels and restaurants – was increased by Rs 114.5 per 19-kg cylinder. It now costs Rs 1,883 in Delhi. This increase comes on top of Rs 28 per 19-kg cylinder raise effected on March 1. Commercial LPG rate has risen by Rs 302.50 this year.
Officials said the increase follows a steep rise in global energy prices since the US and Israel attack on Iran last weekend triggered a wider military conflict in the oil and gas-rich Middle East.
The conflict has led to a near halt in tanker movement through the Strait of Hormuz – the narrow but critical sea lane between Iran and Oman used by Middle Eastern producers to export oil and gas to global markets. The disruption has sharply curtailed energy shipments from the region, triggering a spike in global oil and gas prices.
