A domestic LPG cylinder (weighing 14.2kg ) will now cost Rs.999.50 in Delhi. The new rate comes into effect after the latest price hike of Rs.50. Over the last year, cooking gas prices were hiked six times, and a domestic gas cylinder now costs Rs.200 more than it was in May 2021.
Earlier this week, a hike of Rs.102.50 was announced for the commercial LPG cylinder (weighing 19 kg). This follows the steep increase of Rs.250/cylinder in April. So now, to buy a 19 kg commercial LPG cylinder, you have to shell out Rs.2355.50 and Rs.655 for a 5 kg cylinder.
Cooking gas prices are affecting people badly
Speaking to TNV, a retired senior citizen said she bought a domestic LPG cylinder for Rs.929.00 and received a subsidy amount of Rs.36.45 in March 2022. Hers is a family that orders takeaways from nearby restaurants for a minimum of one meal a day. She added that her family already feels the pinch of gas price hike, as takeaways have become costlier because commercial cylinders have become expensive and cooking at home equally dearer.
The plight of people in the low-income category is even worse. They can’t afford to buy safe, hygienic cooked food. So eating out or takeaways are restricted to occasions and emergencies. And when they cook at home, all three meals a day, they require a minimum of three cylinders in two months. For a family earning less than Rs.10,000 a month, shelling out Rs.1500 a month for cooking gas is quite an expenditure. If more members are in the family, the requirement scales up further.
TNV opinion: Why is the government paying frugal amounts as LPG subsidies? Should they not increase it, considering the current situation? Also, the public should be told how much who is earning–the revenue going to the state and central governments and oil companies. Indeed, they can afford to take a cut on their gains than the common-man punching a hole into his pocket.
How is the LPG cylinder price calculated?
India imports crude to meet 85 percent of its domestic demand. The crude oil thus imported is refined by state-run and private oil refineries into petrol, diesel, and LPG products. And any fluctuations in international prices influence the market prices of these products in India.
In particular, the cooking gas price is set on Import Parity Price (IPP). IPP is calculated based on international market prices. The world’s largest oil producer, Saudi Aramco’s prices are the basis internationally. It includes free on board (FOB) price, custom duties, ocean freight, port charges, and insurance cover in dollar value.
With the corresponding cost in Indian Rupees, inland freight, oil companies’ margin, bottling cost, marketing expense, dealer commission, and GST are added to arrive at the retail value of non-subsidized cooking gas. This price is revised every month as per the benchmark fuel price of the preceding month.