LPG rates hiked, cooking set to become costly

Source :SIFY
Author :SIFY
Last Updated: Fri, Feb 14th, 2020, 13:03:07hrs

New Delhi: Cooking across the country is set to become expensive with the latest LPG (liquefied petroleum gas) rates. On Wednesday, oil marketing companies announced a hike after a spurt in benchmark global rates of crude petroleum. Consumers who booked a cylinder on Wednesday were quick to spot the change in rates.

The rates for LPG have been hiked by Rs 144.5 per cylinder (14.2 kilograms) by Indian Oil Corporation Limited. Wit this revision, a cylinder costing Rs 714 in Delhi costs Rs 858.50. Rates have been changed in Kolkata, Mumbai, and Chennai as well. Approximately 11 crore households subscribe to IOCL which delivers the Indane brand of LPG. "In Delhi price of Indane gas rose to Rs 858.50 (increased by Rs 144.50), in Kolkata Rs 896.00 (increased by Rs 149), in Mumbai Rs 829.50 (increased by Rs 145) and in Chennai Rs 881.00 (increased by Rs 147)."

This is the steepest hike in rates since January 2014 when prices had gone up by Rs 220 per cylinder to Rs 1,241.

Rates for Bharatgas (BPCL) and HP Gas (HPCL) are yet to be announced, however consumers who booked for a cylinder on Wednesday found the newer rates similar in line with that of IOCL.

Rates have been hiked for 19 cylinders while new rates for 5 kilo cylinders are yet to be announced.

The only respite consumers have at the moment is subsidies on cooking gas. Consumers in the country purchase LPG cylinders at market prices and later get the subsidy benefits. Consumers can book for 12 cylinders of the 14.2 kilo variant per household in a year and subsidy amount is credited to their bank accounts.

With the hike in rates, the subsidy amount too has been increased. The government subsidy payout to domestic users has been increased from Rs 153.86 per cylinder to Rs 291.48 according to officials.

Also, the government gave out 8 crore free LPG connections to poor women under PMUY to increase coverage of environment-friendly fuel in kitchens. For Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries, subsidy has been increased from Rs 174.86 to Rs 312.48 per cylinder. After accounting for the subsidy paid directly into the bank accounts of LPG users, a 14.2-kg cylinder would cost Rs 567.02 for domestic users (with subsidy) and Rs 546.02 for PMUY users.

The cylinder and subsidy rates could differ from geography, OMC price and the total subsidy amount. Subsidy amount depends on changes in the average international benchmark LPG rate and foreign exchange rate.

While OMCs have been announcing revised rates for LPG every month and Petrol/Diesel rates every day, the revised LPG rate for February was delayed by more than a week. Many attributed the reason to the Delhi elections, however, officials reasoned it was owing to getting approvals for a large jump in subsidy outgo.

Speaking about subsidies, Finance Minister Nirmala Sitharaman's budget announcement for Budget2020 saw allocation to fuel subsidies, especially LPG and Kerosene, grow by 6% to Rs 40,915.21 crores for the fiscal 2020-21.

Amount allocated to LPG subsidy for next fiscal has increased to Rs 37,256.21 crores from Rs 34,085.86 cr in current fiscal. The total fuel subsidy in revised estimates was affixed at Rs 38,568.86 crores for current fiscal. Kerosene subsidy allocation has been reduced to Rs 3,659 crores for 2020-21 from revised estimates of Rs 4,483 crores for current fiscal.

*With agency inputs