LPG connections may cost less

The petroleum ministry is considering a proposal to reduce the security deposit of LPG cylinders by around Rs 50 per cylinder. This would imply that the security deposit of cylinders would come down from Rs 700 to Rs 650. The decision to this effect is expected to be taken by the ministry in a couple of days.

According to sources, this move is expected to be finalised soon as the procurement cost of the cylinders have gone down in the current financial year. However, another view, which the ministry is examining is that international prices of iron and steel (the raw material which is required for the manufacturing of cylinder) is firming up. Hence, the ministry wants to avoid a situation whereby the security deposits are first reduced and then again hiked.

Other issues which needs to be taken into account while calculating the possible reduction in the security deposits include the extra costs which goes into the cylinders including a cost of Rs 35 per cylinder for security valves and the cost to maintain one additional cylinder for every two cylinders. However, since the deposit which the oil companies get is interest free such other costs are taken care off, sources said.

The ministry would consider the above opinions, which have been elaborated by the oil companies and the cylinder manufacturers before deciding on the possible reduction in the deposit rates, sources said.