The price of Liquefied Petroleum Gas (LPG) has been hiked by Rs 50 for the second time this month. As a result, the price of cylinders increased by Rs 100 in the last 15 days.
According to Indian Oil Corporation, a non-subsidised 14.2 kg gas cylinder in Delhi will now cost Rs 644, while it will be Rs 670.50 in Kolkata, Rs 644 in Mumbai and Rs 660 in Chennai.
Similarly, the price of 5 kg short-cylinder has been increased by Rs 18 and the price of a 19 kg cylinder increased by Rs 36.50.
The price of LPG gas cylinder is determined by the state-run oil companies and is revised on a monthly basis.
Indian households are allowed a maximum of 12 LPG cylinder purchases per year at subsidized rates. Cylinders have to be bought at full price at the time of purchase, and the subsidy is then credited to the customer's bank account by the government.
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The subsidy amount varies every month and is dependent on the changes in the average international benchmark LPG prices added with the foreign exchange rate.
However, most customers have not received subsidies since May, as the combination of international oil price collapse and domestic refill rate increase diminished the gap between subsidised and market rates. If international oil prices remain stable for the remainder of the financial year, the government would end up making massive subsidy savings in a year the pandemic has strained public finances.
For the government, cooking gas subsidy has shrunk to Rs 1,126 crore in the first half of this financial year from Rs 22,635 crore for the entire 2019-20. LPG subsidy had fallen 28 per cent in 2019-20 from Rs 31,447 crore in 2018-19 as oil prices stayed low and domestic refill rates rose.
