Giving a new year gift to the people of Delhi, the government has announced a major reduction in LPG prices. The rate of non-subsidised LPG cylinder has been reduced by Rs 120.50 while the price of subsidised LPG cylinder has been cut by Rs 5.91, said Indian Oil Corporation. The prices, however, have been kept unchanged in other cities.
From midnight tonight, a 14.2-kg subsidised LPG cylinder will cost Rs 494.99 in the national capital as against Rs 500.90 currently, Indian Oil Corp (IOC), the country’s largest fuel retailer, said in a statement. This is the second straight monthly reduction in LPG rate. On December 1, subsidised LPG price was cut by Rs 6.52 per bottle, after six consecutive monthly hikes in rates.
The two price reductions have mostly negated the Rs 14.13 per cylinder increase in rates between June and November. IOC said non-subsidised or market priced LPG rates have been cut by a steep Rs 120.50 per cylinder “due to fall in price of LPG in the international market and strengthening of US dollar-rupee exchange rate.”
The prices of subsidised LPG cylinder in Kolkata and Mumbai are Rs 504.12 and 498.57, while that of the non-subisidised cylinders are Rs 837 and Rs 780.50.
All LPG consumers have to buy the fuel at market price. The government, however, subsidises 12 cylinders of 14.2-kg each per households in a year by providing the subsidy amount directly in bank accounts of users. This subsidy amount varies from month to month depending on the changes in the average international benchmark LPG rate and foreign exchange rate.
When international rates move up, the government provides a higher subsidy. And when they come down, the subsidy is cut. As per tax rules, GST on LPG has to be calculated at the market rate of the fuel. The government may choose to subsidise a part of the price but tax will have to be paid at market rates.
So, with the fall in market price or non-subsidised LPG price, the tax incidence on subsidised cooking fuel has also come down, leading to the current price reduction.
“Accordingly, the upfront cash payment by the consumer of domestic LPG will also reduce by Rs 120.50 per cylinder. Domestic LPG consumer will now be required to make upfront cash payment of Rs 689 a cylinder in place of Rs 809.50 per cylinder,” IOC said.
Subsidised cooking gas consumers will get Rs 194.01 per cylinder subsidy in their bank accounts for the month of January. The subsidy transfer in the customer’s bank account has been reduced from Rs 433.66 in November and Rs 308.60 in December.
(Inputs from PTI)
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