The Centre has doubled quantum of monthly increase in domestic LPG cylinder price to Rs.4 aiming to hasten the end of the subsidy for LPG. The gap with the market price is now just Rs.86.54.
Since June, state-run fuel retailers started raising the price of refills by Rs.4 every month to speed up the process of bridging the gap between subsidised and market rates of domestic LPG. With oil prices expected to remain low, the higher quantum of monthly hike could wipe out the subsidy sooner if oil prices fall further. Each household is entitled to 12 cylinders of 14.2 kg at subsidised rates in a year and pays market rate for refills beyond this cap. A subsidised cylinder effectively costs Rs.488 each in Mumbai, currently, as Rs.66 is transferred to the consumer's account. A non-subsidised domestic cylinder, bought after the quota is exhausted costs Rs.554.
Since June, state-run fuel retailers started raising the price of refills by Rs.4 every month to speed up the process of bridging the gap between subsidised and market rates of domestic LPG. With oil prices expected to remain low, the higher quantum of monthly hike could wipe out the subsidy sooner if oil prices fall further. Each household is entitled to 12 cylinders of 14.2 kg at subsidised rates in a year and pays market rate for refills beyond this cap. A subsidised cylinder effectively costs Rs.488 each in Mumbai, currently, as Rs.66 is transferred to the consumer's account. A non-subsidised domestic cylinder, bought after the quota is exhausted costs Rs.554.
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