Subsidised cooking gas (LPG) price on Wednesday was hiked by 28 paisa per cylinder and now costs over Rs 82 more than the rate in 2014, when the BJP government came to power.
Also, Jet fuel (ATF) price was hiked by over 2.5 per cent, the third straight monthly increase in rates on the back of firming global prices, according to a price notification issued by state-owned oil firms.
The price of Aviation Turbine Fuel (ATF) was hiked by Rs 1,595.63 per kilolitre, or 2.5 per cent, to Rs 65,067.85 per kl in the national capital.
The increase comes on the back of a Rs 677.1 per kl hike in rates effected from April 1, and a steep 8.1 per cent (Rs 4,734.15 per kl) jump in prices on March 1.
LPG price was hiked by Rs 0.28 per cylinder and that of non-subsidised gas by Rs 6 per bottle.
A 14.2-kg subsidised LPG cylinder will now cost Rs 496.14 in the national capital as against Rs 495.86 previously.
With this increase, the price of subsidised LPG has gone up by over 82 or about a fifth in last five years.
Subsidised LPG was priced at Rs 414 per cylinder in early 2014.
Simultaneously, the price of non-subsidised LPG was increased by Rs 6 per 14.2-kg cylinder to Rs 712.50.
This is the third straight increase in LPG rate.
Non-subsidised LPG is the gas that consumer buys after exhausting their quota of 12 cylinders of 14.2-kg at sub-market or subsidised rates in a year.
The hike in ATF rates will add to the burden of cash strapped airlines that are already reeling under pressure from cut-throat competition in the sector.
LPG, as well as ATF prices, are revised on 1st of every month based on the average international rate for benchmark fuel and foreign exchange rate in the preceding month.
Also, the price of kerosene sold through the public distribution system (PDS) was increased to Rs 31.13 per litre in Mumbai from Rs 30.87.
This is in accordance with the 2016 decision to raise rates by 25 paise a litre every month till subsidy on the fuel is eliminated.
Non-subsidised kerosene costs Rs 64,177.63 per kl (Rs 64.17 per litre) in the national capital.
Official sources said, the rise in LPG price has been necessitated due to tax impact on the increased market rate of the fuel.
All LPG consumers buy the fuel at market price. The government, however, subsidises 12 cylinders of 14.2 kg each per households in a year by providing the subsidy amount directly in bank accounts of users.
This subsidy amount varies from month to month depending on the changes in the average international benchmark LPG rate and foreign exchange rate.
When international rates move up, the government provides a higher subsidy. And when they come down, subsidy is cut.
According to tax rules, the goods and services tax on LPG has to be calculated at the market rate of the fuel. The government may choose to subsidise a part of the price but tax will have to be paid at market rates.
So, with the rise in market price or non-subsidised LPG price, the tax incidence on subsidised cooking fuel has also increased, leading to the current price hike.