Union Minister of Petroleum and Natural Gas Hardeep Singh Puri on April 7 said that the prices of LPG gas cylinders will be hiked by Rs 50 per cylinder from tomorrow morning. While speaking at a press conference, the minister noted that the 14.2-kg domestic cylinder worth Rs 803 will now cost Rs 853.
The domestic LPG cylinders will now cost Rs 550 per piece for Ujjwala beneficiaries, and Rs 853 apiece for non-Ujjwala beneficiaries.
The LPG price hike will be reviewed every 15 days and altered based on international prices, the minister further said.
"International price of LPG has been going up. It went up from $415 per MT to $712 per MT, but we never passed it to consumers. The rate of increase has been absorbed by the OMCs…The Rs 50 increase on LPG cylinders addresses the current under-recovery and not the back log. For the back-log, we will be making a request to the Finance Ministry. The three state-run OMCs have incurred LPG under-recovery of Rs 41,338 crore in the last fiscal," the minister said.
Speaking about the rise in excise duty on petrol and diesel, Hardeep Singh Puri said that it will not be passed on the consumers. "You can legitimately expect prices of petrol and diesel to be moderated by the oil marketing companies in keeping with the global price. In a deregulated sector, you can expect them to accordingly adjust the market retail price," he said.
India imports more than 60 percent of its domestic LPG consumption. The prices of LPG
in the country are linked to its price in the international market. The government
continues to modulate the effective price to consumers for domestic LPG.
The government also hiked excise duty on petrol and diesel by Rs 2 each. According to the government notification, the excise duty on petrol and diesel was increased to Rs 13 per litre and Rs 10 per litre, respectively.
LPG compensation
On the under-recovery incurred by the OMCs on the sale of LPG cylinders, Puri said the government is committed to compensate the oil firms for the losses. The three state-run OMCs incurred under-recovery of Rs 41,338 crore in the last fiscal.
He added that the government had approved a one-time compensation of Rs 22,000 crore for the OMCs in October 2022, for cumulative losses of Rs 28,000 crore incurred by the companies on LPG cylinders’ sale.
During the period 2020-21 to 2022-23, the average Saudi CP (international benchmark for LPG pricing) went up from $415 per MT to $712 per MT. However, the increase in the international prices was not fully passed on to the customers, he added.
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