LPG cylinder price breaches ₹1,000 mark in several cities

NEW DELHI: Cooking gas on Saturday became costlier by ₹50 per cylinder with the second rate hike in less than two months pushing the price for about 289 million households to over ₹1,000 per 14.2 kg refill in many places, mainly because of the rising international energy costs due to the Ukraine war.

According to Indane price published by dealers of state-run Indian Oil Corporation (IOC), domestic liquified petroleum gas (LPG) on Saturday jumped to ₹999.50 per cylinder in Delhi. Prices of fuel vary across the country based on local levies and transportation costs. For instance, its cost in Gujarat’s Navsari town is ₹1,008.50 per 14.2 kg cylinder, ₹1,026 in Ludhiana (Punjab), ₹1,015.50 in Chennai (Tamil Nadu) and ₹1,098 in Patna (Bihar).

India’s cooking gas market is dominated by three state-run oil marketing companies – IOC, Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL). They had last hiked their rate by ₹50 per cylinder on March 22 to ₹949.50 in Delhi after over a year. Earlier, the domestic LPG prices were revised by ₹15 on October 6, 2021 at ₹899.50 per 14.2 kg cylinder in Delhi.

This is not the first time that cooking gas prices have skyrocketed. In January 2014 it was ₹1,241 per 14.2 kg cylinder in Delhi. Since then its rates remained volatile, but from May 1, 2020 when a cylinder’s price was reduced by ₹170 to ₹581.5, cooking gas prices have only risen barring a minor ₹10 per cylinder price reduction in April 2021, according to official data.

LPG and natural gas are key fuels for the Indian households. According to a statement of the petroleum ministry issued last year, as on January 1, 2021, total domestic LPG consumers in the country were 28.9 crore (289 million), besides, 70.75 lakh (7.75 million) domestic consumers were also using piped natural gas (PNG). Gas distributer in Delhi, Indraprastha Gas Limited (IGL), in mid-April increased prices of domestic PNG by ₹4.25 per unit to ₹45.86 per standard cubic meter (SCM) in Delhi.

The companies on May 1 had already raised prices of commercial LPG cylinders by ₹102.50 per 19 kg to ₹2,355.50 from ₹2,253 and a hike in domestic LPG was expected.

Two executives in state-run oil companies said on condition of anonymity that global oil market is volatile and they have tacit political pressure to shield consumers from steep price hike especially when inflation has spiked beyond the tolerance level of 6% specified by the Reserve Bank of India (RBI). The central bank this week suddenly raised policy rates by 40 basis points to tame raging inflation. India’s benchmark inflation rate, as measured by the Consumer Price Index (CPI) had come at 6.95% in March 2022. A research note by Pranjul Bhandari, chief India economist at HSBC said that CPI growth in April is expected to be in the 7.5% ballpark. HT reported it on May 5.

“Petrol and diesel prices will be increased soon as revenue losses on them are unbearable to the extent of about ₹8 on petrol and over ₹20 on diesel. It is only a matter of time – either centre and states cut taxes or OMCs [state-run oil marketing companies] will be forced to raise rates,” one of the executives said. Unable to pass on the surging global crude oil prices to the consumer under tacit political pressure for the last one month, the domestic oil companies have resorted to a range of emergency measures such as stopping credit facilities to pump owners and rationing fuel supplies to retail outlets, leading to many pumps on the verge of getting dry, HT reported on Friday. State-run fuel retailers – IOC, BPCL and HPCL – have frozen petrol and diesel rates since April 5, 2022.