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Saturday, May 21, 2022

In absence of LPG subsidy, consumers to bear burden | India News

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NEW DELHI: Following the latest hike in LPG rate that has taken the price of a cylinder past Rs 1,000 in many cities, domestic consumers will have to bear the entire burden of the increase in the absence of subsidy. The government had scrapped the LPG subsidy in May 2020, taking advantage of a fall in global energy prices due to the pandemic.
Domestic LPG rates were last revised on March 22 this year by Rs 50, breaking the price freeze since October 6, 2021, when prices were raised by Rs 15 per cylinder. Household LPG price stood at Rs 714 on January 1, 2020 in Delhi. It went up to Rs 858 in February that year but subsequently came down twice but remained north bound till the freeze in October 2021.
The government controls consumer prices of LPG but commercial refills of 19kg are sold at market-determined rates. Domestic LPG prices are benchmarked to Saudi Aramco’s FOB (free on board) price for the fuel. Ocean freight, insurance, port charges and customs are added to Saudi benchmark. The final cost is arrived at after loading bottling charges, inland transportation, dealer margins and state taxes.





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