Quarterly revision in LPG, kerosene prices put off

Move to 'ease burden on consumers' from increase in state levies

The petroleum ministry on Wednesday put on hold the quarterly revision in the retail prices of domestic liquefied petroleum gas (LPG) cylinders and kerosene, due this month.

The revision was to occur on account of increases in state-specific costs on the two products.

These revisions would have jacked up the price of domestic LPG by Rs 5.5 a cylinder in Madhya Pradesh, by Rs 4.5 a cylinder in Kerala, by Rs 3 in Karnataka and by Rs 1 a cylinder in Uttar Pradesh. The revision would have also meant a small increase in kerosene price of 8 paise and 2 paise in Uttar Pradesh and Haryana, respectively.

While the government put the price increase in abeyance, it allowed a reduction in the price of the two products on account of state levies. After the decision, LPG prices would come down by Rs 9.5 a cylinder in Assam, Rs 3 a cylinder in Maharashtra and Rs 1.5 a cylinder in Bihar. Also, kerosene prices would come down by Rs 1.32 a litre in Navi Mumbai and Rs 0.11 a litre in Maharashtra.

The decision is aimed at “easing the burden on consumers” and comes a day after prices of jet fuel and non-subsidised LPG were raised by 0.5 per cent and Rs 16.50 a cylinder, respectively, as international oil prices soared due to an insurgency crisis in Iraq. Oil marketing companies (OMCs) had increased the prices of petrol by Rs 1.69 a litre and diesel 50 paise a litre on Monday.

“The revision of selling price of domestic LPG and PDS (public distribution system) kerosene to those consumers on account of upward revision of state levies would be deferred till the discussions on the levies are completed with states,” the ministry said in a statement.

The benefit of reduction in selling price of domestic LPG and PDS kerosene in the states would remain in force till the review of state costs.

OMCs incur certain state specific costs (SSC) due to levies such as entry tax, octroi and input tax restrictions on value-added tax (VAT) which become irrecoverable levies for them. The government had introduced an SSC scheme in July 2012 to recover such irrecoverable levies from the consumers of the state or municipal area levying such taxes, to ensure revenue demands of a few states do not burden consumers across the country.

OMCs have been revising prices of sensitive petroleum products, including PDS kerosene and domestic LPG, in 12 states where such taxes were being incurred. The next revision was due this month.