Mumbai, November 9: The price of domestic cooking gas LPG has been hiked by over Rs 2 per cylinder on Friday. The hike comes after the government increased the commission paid to LPG dealers. According to a price notification of state-owned fuel retailers, a 14.2-kg subsidised LPG cylinder in Delhi will now cost Rs 507.42 as against Rs 505.34 previously. Meanwhile, in Mumbai, a 14.2-kg LPG cylinder now costs Rs 505.05, in Kolkata, it is priced at Rs 510.70 while in Chennai, the LPG cylinder will cost Rs 495.39.
It must be noted that this is the second increase in rates this month. The rates differ from state to state depending on local taxes and transportation cost. The earlier hike being on November 1, when prices went up by Rs 2.94 per cylinder because of tax component on the base price. On November 1, the non-subsidised or market price LPG rates went up by Rs 60 per cylinder to Rs 939. Due to a rise in dealer’s commission, the price is now Rs 942.50 per 14.2-kg cylinder. The rates have gone up every month since June as the GST paid on higher base price and cumulatively prices increased by Rs 16.21.
In that order, the ministry said the domestic LPG distributors’ commission for 14.2-kg cylinder and the 5-kg cylinder was last fixed at Rs 48.89 and Rs 24.20 respectively in September 2017. “Pending finalisation of De-Novo Study for revision of LPG distributors’ commission and taking into consideration the increase in transportation costs, wages etc, it has been decided to revise the distributors’ commission to Rs 50.58 per 14.2 kg cylinder and Rs 25.29 per 5 kg cylinder as an interim measure,” the order said.
According to a report by PTI, the new dealer’s commission will be made up of Rs 30.08 establishment charges and Rs 20.50 delivery charges for a 14.2-kg cylinder. The Ministry order said that for 5 kg cylinder, the establishment charges have been fixed at Rs 15.04 and the rest Rs 10.25 are delivery charges. Customers who collect their refills directly from distributor’s premises will continue not to be charged for delivery, it said.
Before the hike, the dealer’s commission was made up of Rs 29.39 establishment charges and Rs 19.50 delivery charges for a 14.2-kg cylinder. For 5 kg bottle, the establishment charges were Rs 14.70 and delivery charges Rs 9.50, the report added.
In India, all LPG consumers have to buy the fuel at market price. The government, however, subsidises 12 cylinders of 14.2-kg each per households in a year by giving the subsidy amount directly in the user’s bank accounts. This subsidy amount varies from month to month depending on the changes in the average international benchmark LPG rate and foreign exchange rate.
The government provides a higher subsidy when international rates move up but as per tax rules, GST on LPG has to be calculated at the market rate of the fuel. The government may choose to subsidise a part of the price but tax will have to be paid at market rates.This has led to an increase in price.