On Saturday, in the monthly revision of LPG cylinder prices, state-owned oil marketers left the rates unchanged for August. These rates are generally revised at the start of every month based on changes in the international oil prices and the Indian rupee's valuation against the US dollar.
A pause in rates comes after two straight months of hikes. Also, there has been a marginal increase of 50 paise in the LPG cylinder prices in Kolkata.
|Cities||Prices with effect from 1 August 2020 (Rs)||Previous price (Rs)|
Households in India are allowed a maximum of 12 LPG cylinder purchases per year at subsidized rates. However, cylinders have to be bought at full price at the time of purchase, and the subsidy is then credited to the customer's bank account by the government.
From May to July, the hike in cooking gas price has been below Rs 10 per 14.2 kg cylinder due to favourable international oil prices amid coronavirus pandemic. During this period, consumers have not received any subsidy for their purchases as it is reportedly the low oil prices in the market that has eliminated the need for the subsidy.
"Together with the frequent increase in price of subsidised cooking gas and a fall in global oil and product prices, the government has completely eliminated their oil subsidy burden on account of LPG since May this year. With oil prices expected to be range blind closer to current levels, the government may not need Rs 37,256 crore as LPG subsidy provided in FY21," an unnamed energy sector expert told IANS agency recently.
The current price of subsidised LPG cylinder is around Rs 594, the same rate as LPG cylinder prices prevailing in the market. According to an analysis done by Emkay Global, oil companies' under-recovery in case of kerosene has come to a naught since March while that for LPG has become zero from May