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LPG cylinders to cost Rs 50 more as crude prices go up


Households will have to shell more for cooking gas from Wednesday onwards as LPG price has been increased by Rs 50 per cylinder. The revision, the second in December, is attributed to the rising crude prices.

As per a price notification of the state-run oil marketing companies, the price of non-subsidised 14.2 kg LPG cylinder has been increased to Rs 694. Earlier, the cylinder was priced at Rs 644.

On December 1, price was hiked by a similar Rs 50 per cylinder. Before that, the price had remained unchanged at Rs 594 a cylinder since July. This was the same rate at which subsidised LPG refills are also sold.

Since May, most cooking gas customers have not received subsidies as the combination of international oil price collapse and domestic refill rate increases brought parity between subsidised and market rates.

A subsidised cooking gas cylinder was priced at Rs 497 in Delhi in June 2019. Since then, prices have cumulatively gone up by Rs 147. However, the increase in rates this month would mean that the government will have to resume paying subsidies to consumers. Notably, rates of LPG are revised every fortnight.

Price of 5 kg LPG cylinders also increased

Alongside an increase in the price of 14.2-kg LPG cylinders, rates of the 5-kg bottles were increased by Rs 18 and those of the 19-kg cylinders by Rs 36.50.

Households in India are allowed a maximum of 12 LPG cylinder purchases per year at subsidized rates. Cylinders have to be bought at full price at the time of purchase, and the subsidy is credited to the customer’s bank account by the government.

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Non-subsidised LPG now costs Rs 720.50 in Kolkata, Rs 694 in Mumbai, and Rs 710 in Chennai. Rates defer from state to state depending on the incidence of local sales tax or VAT.

6.3% hike in ATF price

Aviation turbine fuel (ATF) price has been also increased by 6.3 per cent. Simultaneously, the price of jet fuel was hiked by Rs 2,941.5 per kilolitre, or 6.3 per cent, in Delhi to Rs 49,161.16 per kl.

This is the second increase in ATF price this month. Rates had gone up by 7.6 per cent (Rs 3288.38 per kl) on December 1.

Like LPG, ATF prices too are revised on the 1st and 16th of every month based on the average rate of benchmark international fuel and foreign exchange rate in the preceding fortnight.

Jump in crude prices

While the coronavirus pandemic and the lockdown imposed by major economies to contain the virus resulted in a decline in oil demand causing a major slump in prices, crude prices have gone up considerably with the reopening of the economies.

While crude price was hovering around Rs 3,290 per barrel on December 2, it has surpassed the Rs 3,500 mark on December 16. Notably, crude price was around Rs 2,700 per barrel on November 2.


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