Oil marketing companies (OMCs) have undertaken another hike in LPG prices on May 19, raising it by Rs 3.50 to Rs 1,003 in Delhi for a 14 kg cylinder.
Non-subsidised LPG now costs Rs 1,003 per 14.2-kg cylinder in the national capital, up from Rs 999.50 previously, according to a price notification of state-owned fuel retailers.
Earlier this month, the price of domestic cooking gas was hiked by Rs 50 per cylinder, the second increase in two months. The price of commercial LPG cylinders was also hiked by Rs 102.50. Each of the commercial LPG cylinders will now cost Rs 2,355.50 as against Rs 2,253 earlier.
Since April 2021, prices have risen by Rs 193.5 per cylinder. Petrol and diesel prices however continue to be on freeze for the 43rd day in a row. The pause followed rates being hiked by a record Rs 10 per litre in a matter of 16 days beginning March 22.
Non-subsidised cooking gas is the one that consumers buy after exhausting their quota of 12 cylinders at subsidised or below-market rates. However, the government pays no subsidy on LPG in most cities and the price of the refill that consumers, including the poor women who got free connection under the much-talked Ujjwala scheme, is the same as that for non-subsidised or market price LPG.
Non-subsidised LPG costs Rs 1,002.50 per 14.2-kg cylinder in Mumbai while it is priced at Rs 1,018.50 a bottle in Chennai and Rs 1,029 in Kolkata. Rates differ from state to state depending on the incidence of local taxes such as VAT. Prices are higher in states with higher taxes.
Alongside, oil firms also hiked the price of commercial LPG cylinders - the ones used by establishments like hotels and restaurants - by Rs 8 per cylinder to Rs 2,354 per 19-kg bottle. On May 1, the price of a commercial LPG cylinder was increased by Rs 102.50 to Rs 2,355.50 but on May 7 it was reduced to Rs 2,346. International oil prices have been on the rise this year. They jumped to a 13-year high of USD 140 per barrel in March before shedding some of the gains. Brent was trading at USD 110.13 per barrel on Thursday.
To compound things, the Indian rupee tumbled to Rs 77.74 to a dollar, making imports costlier. India relies on overseas purchases to meet about 85 per cent of its oil requirement, making it one of the most vulnerable in Asia to higher oil prices.
While India has surplus oil refining capacity, it does not manufacture enough LPG to meet domestic demand and imports significant quantities from nations such as Saudi Arabia. On Wednesday, an oil ministry official stated that the Saudi LPG prices have gone up by 33 per cent while domestic rates have increased by only 11 per cent.
Consumer price inflation in April accelerated to 7.79 percent, the fastest pace since the 8.3 percent recorded in May 2014, indicating a sharp uptrend in prices across the board and remaining above the upper limit of the central bank’s tolerance band of 6 percent for the fourth month in a row.
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