LPG prices may be hiked again next week

Starting next week, cooking gas LPG (liquified petroleum gas) may be hiked after under-recovery on the fuel widened to over Rs 100 per cylinder. The rate hike, which includes the quantum of increase, depends on the government permission. If the government permits, the hike will be the fifth in cooking gas rates across all categories like households using subsidised gas for cooking and heating purposes and non-subsidised fuel and industrial sized gas. On October 6, the rates of  LPG were increased by Rs 15 per cylinder, taking the overall rise to Rs 90 per 14.2-kg cylinder, since July.

So far, state-owned oil marketing companies have not been allowed to align retail selling price with cost, and no subsidy from the government has been approved to bridge the gap.

No announcement on deregulation of cooking gas prices

As international energy prices soared to a multi-year high, the under-recovery or losses on LPG sales have mounted to over Rs 100 per cylinder. While Saudi LPG prices have increased by 60% to $800 per month. The international benchmark Brent crude oil is trading at $85.42 per barrel.

Last year the government eliminated subsidies on LPG by bringing retail prices at par with the cost through periodic hikes. And, unlike petrol and diesel prices which have been decontrolled, the government has not made any official announcement on the deregulation of LPG rates.

If the government is not willing to bear the subsidy, retail price would have to be hiked and in-addition to that, the increases might be moderated to spare consumers of any steep burden.

In places like Delhi and Mumbai, cooking gas costs Rs 899.50, whereas it costs Rs 926 in Kolkata. This is the rate that both domestic households and poor households that got free connections under the Ujjwala scheme and industrial users pay at present.