Starting from July 1, the price of non-subsidised liquefied petroleum gas (LPG) has gone up. This change comes in the wake of the rising crude oil prices on the international market which has also pushed petrol and diesel prices up. As it stands the price of LPG cylinder has gone up by Rs 25.00 for the 14.2 kg cylinders and the 19 kg cylinders will cost Rs 75 more. This new price will come into effect as of 1 July. The domestic LPG cylinders weighing 14.2 kgs will now cost Rs 809.00 in Delhi and Mumbai while the same will cost Rs 835.50 in Kolkata and Rs 825 in Chennai.
In the case of the 19kg LPG cylinders, the price hike results in a final price of Rs 1473.50 per cylinder in Delhi, while Kolkata, Mumbai and Chennai stand at Rs 1544.50 per cylinder, Rs 1422.50 per cylinder, Rs 1603.00 per cylinder respectively.
The state-run oil mammoths – Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation – announced that these prices will take effect from July 1 across all of India. Though final prices may vary depending on the city and state.
These prices are revised at the beginning of every month, with that said these prices were unchanged for the month of June as well. In the past six months, the price for LPG cylinders was hiked by Rs 140 per cylinder. This price hike runs parallel to the uptick in the petrol prices across India and especially in metro cities, which is making its way more and more into the triple digits.
This is How the Price is Calculated
LPG pricing in India is based on the Import Parity Price (IPP). The IPP is determined and dependent upon the LPG prices in the international market. The IPP itself is based on Saudi Aramco’s price for LPG which include the free on board (FOB) price, charges on ocean freight, insurance, customs duties and port duties to name a few. The price that is quoted in dollars is converted to rupees.
Then add to it the cost of freight after it is imported, the marketing costs and the charges that oil companies themselves impose such as bottling the cylinders, the commission to the dealers and of course the goods and service tax (GST). After this entire process is said and done the Indian customer finally gets the bottom line, i.e., the retail price.
In the end, this all comes down to the crude oil prices again, and AP reported that Benchmark U.S. crude oil’s delivery for the month of August rose 49 cents per barrel on Wednesday, making the price $ 73.47 per barrel. Brent crude oil for the August delivery rose 37 cents per barrel, which brought the final price to $ 73.12 per barrel