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Market price of LPG cylinders now at Rs 883

Global kerosene and LPG prices divergent to those of diesel, petrol and ATF

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In the first price revision after the government capped the number of subsidised cylinders for consumers, domestic liquefied petroleum gas (LPG) has become nearly 17 per cent dearer, thanks to firm international prices. From October 1, the consumer price of every non-subsidised domestic LPG cylinder has risen to Rs 883 from Rs 756 last month.

The non-subsidised cylinders are now priced around 120 per cent higher than subsidised cylinders, which cost Rs 399 in Delhi. The new price, worked out on an average international price of the previous month, would be applicable till October 31, said an official at an oil marketing company (OMC). The average monthly price of has increased from $767.12 per tonne (FOB) in August to $933.08 in September. The over 21 per cent jump has also negated the impact of the weakening rupee in the final landed price at Indian ports.

The international price trend in case of both kerosene and LPG, which gets reviewed on a monthly average, has been divergent compared with diesel, and that see a fortnightly review. While OMCs-IndianOil, Bharat Petroleum and Hindustan Petroleum-saw reduced losses on diesel, better margins on petrol and cut prices of ATF, the losses on kerosene and subsidised domestic LPG went up.
 

BURNING ISSUE
  • Rs 883 The new price for each non-subsidised domestic LPG cylinder from Oct 1
  • Rs 756 The price that was fixed for each cylinder last month
  • 120% Higher is the price of non-subsidised cylinders 
  • Rs 399 The price of subsidised cylinders in Delhi 
  • 21% Jump seen in average monthly price of Arab Gulf LPG

According to the data with the petroleum ministry, the loss on a litre of came down from Rs 13.86 in the second fortnight of September to Rs 11.65 now. OMCs also cut ATF prices by over four per cent from October and their margins on petrol have improved. The changes have taken place largely due to a recovery in the rupee. Against an exchange rate of 55.47 against the dollar in September first half the rupee averaged Rs 53.65 in the second half. OMCs price their products on international trends and convert them to the rupee.

The loss on kerosene, however, increased from Rs 32.70 per litre to Rs 33.93 while on subsidised domestic LPG it went up from Rs 347 to Rs 468.50 per cylinder. Prices for the two, along with diesel, are government controlled.

On September 13, the government decided to limit the sale of subsidised LPG to six per annum to a consumer. While a consumer can now get up to six LPG at subsidised rate of Rs 399 each in Delhi, he will have to shell out the for additional quantities. This market price will see a monthly revision and in the first revision itself prices went up sharply. The government forked out Rs 30,000 crore in the last fiscal to subsidise domestic LPG.

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