No-subsidy gas to cost more in winter

No-subsidy gas to cost more in winter

International prices go up in cold months

No-subsidy gas to cost more in winter

Families using non-subsidised domestic LPG cylinders may have to pay more in peak winters till March than what they pay now as international gas prices have started rising ahead of winter months.

The average monthly price of Arab Gulf LPG, to which the Indian prices have been linked, has increased to $970 per tonne (FOB) at close of September from $767.12 per tonne in August.

Last year, the average price of Arab Gulf LPG had gone above $1,230 per tonne on March 31. The prices have the tendency to shoot up in winter months on the back of a higher demand for LPG, which is used for heating purposes.

Witnessing the trend, one should not be surprised if the price of an unsubsidised LPG cylinder hovers around Rs 1,200, since the oil marketing companies are now free to declare the monthly prices of non-subsidised LPG cylinders for households as per landed cost on import parity basis.

Oil firms have already increased non-subsidised LPG prices to Rs 883 per cylinder from October 1 from Rs 756 in September.

They have also decided to revise the retail selling price of the 14.2-kg non-subsidised LPG cylinder every month based upon the global LPG prices. The premium or discount in prices will be passed on to the consumers.

“This (market-based price mechanism) is the reality and we have to make the consumer aware of that,” a top official of a state-owned oil firm told Deccan Herald. He hoped that the government  would review Indian prices should the cost of LPG shoot up by a big margin in the international market in coming days.

“LPG being a sensitive subject, the government may not like to burden consumers beyond a point,” he said.

The non-subsidised cylinders are already priced around 120 per cent higher than subsidised ones and it is expected that the government may keep a tab on these after a point of time, even if these have now become market-determined.

The government has restricted the supply of subsidised domestic LPG cylinders at six per annum from September 14. For the rest of the fiscal ending March 31, a household will get only three more subsidised cylinders for approximately Rs 400.

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