LPG price increase unlikely this month

Major relief to consumers as oil cos stay their hand

In a major relief to consumers, the prices of non-subsidised cooking gas cylinders may not be hiked this month despite firming international prices.

“There may not be any increase in the cost of LPG refills that consumers but after exhausting their quota of six subsidised bottles,” official sources told Deccan Herald.

Although, the officials declined to give any reason for a possible hold on the price hike, which was earlier decided to follow the market-based pricing mechanism, analysts said, the government cannot take such a risk when the Parliament is in session and also because of th upcoming Gujarat Assembly elections.

State oil companies were expected to pair retail prices of non-subsidised cooking gas cylinders every month from September 13 after the government capped supply of subsidized cylinder six in a financial year. The exercise is done at the end of each month and the next revision is due on November 30. But facing stiff opposition earlier this month, the OMCs had put on hold a Rs 26.5 increase in the prices of non-subsidised cooking gas bottles hours after they announced the hike.

The 14.2 kg non-subsided domestic LPG cylinder now costs Rs 895.50 in Delhi, but the prices vary in different states due to variation in local taxes.

Meanwhile, the Arab-Gulf LPG prices, to which Indian LPG cost is linked, have reached $1,025 per tonne (FOB) as on October 31 from $970 on September 30. They are expected to rise further north at the end of this month in view of the harsh winter conditions in the West from December to March, where LPG is also used for heating purposes.

The OMCs had earlier maintained that any increase or decrease in the price of LPG in the international market would be passed on to the consumers by way of premium or reduction in the domestic prices of non-subsidized LPG cylinders supplied to households during the monthly review.This exercise was expected to be done after the pricing of LPG gas was partially deregulated by the government and the OMCs were given the right to fix prices for non-subsidised LPG cylinders.