LPG price hiked by Rs 11.42 per cylinder

Hike after govt raises commission paid to dealers

With the government agreeing to increase the dealer commission by Rs 11.42 a cylinder, cooking gas prices are set to increase. LPG distributors currently get Rs 25.83 a cylinder as commission from oil marketing companies give them. The commission was earlier revised in 2010.

Besides the commission, OMCs pay Rs 8 for around two lakh delivery men for every cylinder that is sold. In all, the three oil marketing companies will now pay around Rs 4,530 crore to dealers. This amount though is recovered from the consumers.

National Federation of LPG Distributors that has been threatening an agitation is unhappy with the revision. "We have learnt that the government has decided to marginally increase the commission that we get cylinder distribution. It is sad to see that the government is unfortunately not realizing how difficult the present system is to work in. We deem this move unacceptable and stick to our original demands," said Pawan Soni, general secretary of the federation that claims to represent 10,500 dealers and associations across the country.

The dealers would now be meeting S Jaipal Reddy, petroleum minister, on Tuesday. "If our pleas are not heard we will be forced to take drastic action," said Soni. The federation had earlier threatened a strike on October 1. 

The federation is also opposing the capping of subsidised cylinders in the country. The Cabinet Committee on Political Affairs had on September 13 decided that consumers of domestic LPG cylinder would get subsidy for only six
refills. Three state Congress ruled governments of Assam, Delhi and Haryana have already announced offering three more subsidised cylinders. With the increase in dealer commission, subsidised cylinders would be priced around Rs 410 in New Delhi while the non-subsidised cylinders will cost over Rs 894.