Cooking gas price hiked for second time in six days

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The price of domestic LPG cylinders has been hiked by Rs 15, effective from October 6, taking the price of a 14.2 kg, non-subsidised cylinder to a record high of Rs 899.50. The price of a 5 kg cylinder goes up to Rs 502 in the national capital. Within the span of the last six days—incidentally, it coincides with the festive season as Navratri begins on Thursday– domestic LPG prices have been hiked twice. On September 1, the price of domestic cylinders was raised to Rs 884.50 after a hike of Rs 25. In May last year, the price of a full LPG cylinder in Delhi was Rs 581.50.

Rising prices

Within the last three months, domestic cooking gas prices have been raised by Rs 90, which is likely to deal a huge blow to lower-middle-class and poor families, pushing the cylinder out of the reach of many. Many experts have already indicated that a hike in cylinder prices is likely to affect the purchasing power of millions of people, leading to a sharp drop in demand. With the government gradually lowering the support after scrapping the LPG subsidy last year, data from many states have already indicated a drop in demand.

According to some experts, the hike in cylinder prices will also hurt the efforts of Prime Minister Modi to ease the access to LPG connections for poorer households under the Pradhan Mantri Ujjwala Yojana (PMUY), the second leg of which was launched by the Prime Minister last month.

The hike in domestic LPG prices followed a hike in fuel prices on Tuesday. The price of petrol was increased by 25 paise from Rs 102.39 per litre to Rs 102.64 per litre and the price of diesel was increased by 30 paise, raising its price from Rs 90.77 per litre to Rs 91.07 per litre.

Possibility of subsidy

According to a report filed last week, the Ministry of Petroleum and Natural Gas is considering reinstating a subsidy on cooking gas. The ministry was reportedly conducting a survey to find out the threshold at which the subsidy on cooking gas could be reinstated. The survey is being conducted to determine the price at which most of the users will keep buying domestic cylinders. One of the possibilities being discussed was to limit subsidies only to the beneficiaries of Pradhan Mantri Ujjwala Yojana (PMUY).

By March next year, the number of LPG consumers in India is likely to touch 30 crore. Of these, around 20.72 crore will not be covered under the PMUY scheme. At the moment all consumers are paying the full price of refills for cooking gas.