Drop In Subsidised LPG By Rs 1.46 And Non-Subsidised LPG By Rs 30 A Cylinder
In a significant development, on January 31, 2019, one has to pay less for domestic cooking gas as the prices of domestic cooking gas were cut by Rs 1.46 per cylinder. A 14.2 kg LPG cylinder will now cost Rs 493.53 in New Delhi from midnight of Thursday in comparison to the earlier price of Rs 494.99, said Indian Oil Corp (IOC) in a statement, registering the third straight monthly reduction in LPG rate, reported The Indian Express.
IOC emphasising on non-subsidised or market priced LPG said that there is Rs 30 per cylinder cut. IOC said that the reason behind such development is the fall in the price of LPG in the international market along with the strengthening of US dollar-rupee exchange rate”. It will now cost Rs 659 per 14.2 kg cylinder in Delhi.
The slashing of price comes on the heels of Rs 120.50 cut on January 1 and Rs 133 on December 1, 2018. All LPG consumers buy the fuel at market price. For each household, the government provides 12 subsidies cylinders of 14.2 kg per households in a year by providing the subsidy directly into the bank accounts of the users.
On what basis the price change?
However, the subsidy amount alters on a monthly basis depending on the average international benchmark of LPG rate and foreign exchange rate. The subsidy rate is directly proportional to the international rates, which means when international rates go up, the government grants a higher subsidy, and vice versa.
According to the tax rules, GST on LPG has to be calculated at the market rate of the fuel. This means that with the drop in market price or non-subsidised LPG price, the tax incidence on cooking fuel will come down, resulting in the price reduction.
Gift for homemakers
In November 2018, the government increased the price of both subsidised and non-subsidised LPG cylinder. The cost of the subsidised cylinder was increased by Rs 2.94, and the non-subsidised cylinder was hiked by Rs 60. However, the recent move brought by the Modi government is considered to be a gift for homemakers.