Highest LPG Price Hike Ever: Cylinder To Cost Rs 86 More For Non-Subsidy Customers

The Logical Indian

March 2nd, 2017

LPG Price Hike

Source: timesofindia |Image Source: imgix 

India witnessed a steep hike in the price of non-subsidised cooking gas (LPG) by Rs 86 per cylinder on Wednesday, reflecting the international trends.

Those who will buy non-subsidised LPG, because either they have given up their subsidies or exhausted the quota of 12 bottles of 14.2-kg in a year at below market price, will now have to shed Rs 737.50

According to state-owned oil companies, the gas cylinders were priced at Rs 651.50 till Tuesday.

This is the steepest hike ever registered in the history of India that comes a month after cylinder price was increased by Rs 66.5 effective from 1 February.

  • The rates of gas cylinders have been on the rise since October 2016. A non-subsidised LPG cylinder was priced at Rs 466.50 in Delhi in September and has risen by Rs 271 per cylinder or 58% in six instalments.
  • The price of subsidised cooking gas was also increased by oil firms by a marginal 13 paisa to Rs 434.93 per 14.2-kg cylinder. This follows a 9 paise increase effected from 1 February.
  • The price of Aviation turbine fuel (ATF) was also raised by a marginal Rs 214 per kilolitre to Rs 54,293.38 per kl. The increase comes on back of a 3% hike on 1 February.

Every oil firm revises the rates of ATF and cooking gas on 1st of every month depending on the oil price and foreign exchange rate in the preceding month.

An official statement by the Ministry of Petroleum and Natural Gas said the increase in non-subsidised LPG rates were in “line with the rise in global LPG product prices”.

“However, there will be no impact on the LPG consumers receiving subsidised refills,” it said.

The consumer will have to pay Rs 737 for a new refill in Delhi and will receive subsidy amount of Rs 303 in his/her account and the net price for the consumer will be Rs 434, which remains unchanged.


Hence, there will be no net impact of the increase in price of non-subsidised cylinder on the LPG consumers receiving subsidised refills

The Central Government, through its much-publicised campaign, had asked people to give up LPG subsidies. Around 11.3 million people voluntarily gave up their LPG subsidy according to reports in June 2016. Statistics also suggested that only 3% of people who gave up their subsidy had annual income above Rs 10 lakh. Which implies people from the middle and lower classes were far more willing to give up the benefit of the cooking fuel than the more well off.

The increase in the price of LPG is a major blow to the middle-class people who had voluntarily given up the subsidy.


Also Read: No LPG Subsidy For Those With Taxable Income Of More Than Rs 10 lakh

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