LPG Cylinders
LPG Cylinders|IANS (File photo)
Business & Economy

Govt. says it bears price increase on LPG cylinders for bulk of consumers

NetIndian News Network

New Delhi, February 14, 2020

The Government has said that, out of 27.76 crore LPG consumers in the country, it bears most of the increase in the price of cylinders for about 26.12 crore consumers by enhancing the subsidy component.

A press release from the Ministry of Petroleum & Natural Gas said here yesterday that the LPG price is derived based on international market price for the previous month. The LPG price for cooking for consumers under PAHAL (DBTL) is subsidized by the Government, it said.

The subsidy quantum given to the PAHAL consumers by way of Direct Benefit Transfer (DBT) is the difference between the market-determined price and the subsidized price. Today, the national LPG coverage is about 97%, with more than 27.76 crore connections.

"Therefore, out of the about 27.76 crore consumers, in respect of about 26.12 crore consumers the increase in price is borne by the Government by enhancing the subsidy component," the Ministry said.

"On account of a sharp increase in the international price of LPG during January 2020 from $ 448/MT to $ 567/MT, there has been a hike of Rs. 144.50 for a 14.2 kg. LPG cylinder in the market-determined price of domestic non-subsidised LPG in Delhi.

"While the price of domestic non-subsidized LPG cylinder has increased from Rs. 714 per cylinder to Rs. 858.50 per cylinder, the subsidy amount to subsidized consumers in Delhi has increased from Rs. 153.86 per cylinder to Rs. 291.48 per cylinder," it said.

In view of the subsidized price determined by the Government, the subsidized LPG consumers are insulated from the volatility of LPG prices in the international market.

For a 14.2 kg cylinder, the subsidy borne by Government to domestic users is increased from Rs. 153.86 per cylinder to Rs. 291.48 per cylinder. For the Pradhan Mantri Ujjwala Yojana (PMUY) consumers, the subsidy borne by Government has increased from Rs. 174.86 per cylinder to Rs. 312.48 per cylinder.

"Therefore, the impact of price hike is mostly borne by the Government by enhancing the subsidy for subsidized and PMUY consumers," the release added.