Relief Rally For LPG Users: A Look at Gas Prices in India Over 5 Years

Introduction

Liquefied Petroleum Gas (LPG) is a crucial component of the Indian household. It's used for cooking purposes in millions of homes across the country. However, over the past five years, its pricing has undergone significant changes that have impacted consumers' pockets.

Price Hike Trends Over The Years

In 2016, an LPG cylinder cost around INR 419. This price was relatively stable until mid-2017 when it started to increase steadily. By the end of 2017, the cost had risen to INR 495 per cylinder. This trend continued into 2018 with prices reaching up to INR 737 by October.

Yearly Price Fluctuations and Factors Influencing Them

The year-on-year price fluctuations are influenced by several factors including global oil prices and government subsidies. In fact, after a steep hike in late-2018 due to rising international crude oil rates, there was a drop in early-2020 as global demand fell amid COVID-19 pandemic. But this relief was short-lived as prices soon rebounded and peaked at INR 819 per cylinder by February 2021.

The central government on Tuesday slashed the prices of cooking gas by Rs 200 per cylinder for all domestic consumers to rein in inflation ahead of crucial state and general elections. The Union cabinet approved an additional subsidy of Rs 200 under the Pradhan Mantri Ujjwala Yojana (PMUY), taking the total amount of subsidy for Ujjwala scheme beneficiaries to Rs 400.

Impact on Consumers And Government Policies

These frequent hikes have put considerable strain on household budgets especially those belonging to lower-income groups who rely heavily on subsidized cylinders provided under government schemes like Pradhan Mantri Ujjwala Yojana(PMUY). To alleviate this burden somewhat, the government has been trying to regulate these increases through various subsidy programs but their effectiveness remains debatable.

Conclusion: The Way Ahead For LPG Pricing In India

Looking ahead, it seems likely that unless there are major shifts in international market dynamics or substantial policy changes domestically, we may continue seeing volatile pricing patterns for domestic LPG cylinders. As consumers continue grappling with these challenges, it becomes imperative for policymakers to devise more effective strategies ensuring affordability without compromising fiscal prudence.