Cooking gas prices hiked for second time in 12 days
Cooking gas prices hiked for second time in 12 days

Cooking gas prices hiked : About 305 million people will pay more for cooking gas after state-run oil companies raised the price of home liquefied petroleum gas (LPG) by $3.50 per 14.2kg household cylinder on Thursday, the second price hike in less than two weeks.

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Cooking gas prices hiked second time

A residential 14.2kg LPG cylinder would cost 1,003 per refill in Delhi, 1,029 in Kolkata, 1,002.50 in Mumbai, and 1,018.50 in Chennai, following the recent increase in the price of cooking gas.

Due to rising international energy costs as a result of the Ukraine conflict, domestic LPG producers boosted cooking gas prices by $50 per cylinder on May 7.

According to an Indian Oil Corporation (IOC) price statement, commercial LPG has also increased by $8 per 19 kg cylinder, bringing the new price to $2,354 in Delhi on Thursday, the seventh increase this calendar year.

Three state-run oil marketing organisations dominate India’s cooking gas market: IOC, Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd. (HPCL). On March 22, this year, the firms raised their charge by $50 per cylinder in Delhi, bringing the total price to $949.50 for the first time in almost a year. Prior to that, on October 6, 2021, domestic LPG rates were increased by 15%, resulting in a price of 899.50 per 14.2 kg cylinder in Delhi.

Despite the fact that cooking gas costs have risen dramatically in recent years, the government has significantly lowered the fuel’s subsidy. According to official data, it has phased out the direct benefit transfer (DBT) of cooking gas subsidies in most regions, including Delhi, and has reduced the financial burden on the exchequer by nearly 86 percent, from Rs 29,628 crore in 2019-20 to Rs 4,000 crore this fiscal year.

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Since May 2020, when household LPG was priced at 581.50 per 14.2 kg cylinder, the cooking gas subsidy has been phased off in various areas. The government, on the other hand, continues to subsidise consumers’ additional transportation costs, which are frequently less than $50, in far-flung and inaccessible places.

Total cash transfers to customers under the DBT for LPG Consumer (DBTL) scheme have remained zero in Delhi and some other markets since May 2020, according to the Petroleum Planning and Analysis Cell (PPAC), the petroleum ministry’s data keeper. In March and April 2020, this amount [LPG subsidy through DBT] was 231 and 162.43 per cylinder, respectively.

Despite growing domestic LPG costs, the petroleum and finance ministries have not responded to repeated email requests for precise explanations for substantially cutting DBT of cooking gas subsidies since 2020. On May 16, HT reported the same.

The shrinkage of the LPG subsidy through DBT mode is also corroborated by the Union Budget. The actual direct benefit transfer of LPG subsidy, which was ₹29,628 crore in 2019-20 first reduced to ₹23,667 crore [actuals] in 2020-21. Thereafter, it was trimmed drastically to ₹3,400 crore in the revised estimates (RE) of 2021-22 from the budget estimates (BE) ₹12,480 crore. The BE for 2022-23 has been kept at ₹4,000 crore. There is no official data available on specific details of LPG subsidy through DBT mode – number of the beneficiaries, location of such beneficiaries and amount of unit subsidy paid to them.

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