LPG price to go up by Rs 4 every month, subsidy to end soon

New Delhi: TIMES NEWS NETWORK





The government has doubled the quantum of monthly increase in domestic LPG cylinder price to `4 with the aim of hastening the end of subsidy regime for the widelyused kitchen fuel as the gap with market price shrank to `86.54 for each refill in June amid an extended period of low global oil prices. Since June, state-run fuel re tailers have started raising the price of refills by `4 every month with a view to speeding up the process of bridging the gap between subsidised and market rates of domestic LPG.Until then, retailers had been raising the price by `2 every month since a July 2016 order from the oil ministry .

In May , the ministry ordered retailers to double the quantum of monthly increase to `4 to speed up elimination of the subsidy . With oil prices expected to remain low, the higher quantum of monthly hike could wipe out the subsidy sooner if oil prices fall further.

Each household is at present entitled to buy 12 cylinders of 14.2kg at subsidised rates in a year and has to pay market rate for refills bought beyond this cap. A subsidised LPG cylinder now costs `477.46 each in Delhi, while it was `419.18 in June 2016.A non-subsidised domestic cylinder, which consumers buy after exhausting their quota of subsidised refills, costs `564.The government pays the difference directly into the account of consumers who pay the full cost at the time of taking delivery.
“Public sector oil marketing companies (OMCs) were authorised to increase price of subsidised domestic LPG cylinder by `2 per cylinder (14.2kg) per month (excluding VAT) with effect from July 1, 2016,“ oil minister Dharmendra Pradhan said in a written reply in Lok Sabha on Monday .