LPG price cut: Govt owned OMCs again cut cylinder prices amidst ongoing election

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To lure voters for the ongoing General Elections 2024, the price of a 19 kg LPG cylinder has been again reduced in the country this time by Rs 19.  The commercial cylinders will now cost Rs 1,745.50 in New Delhi, Rs 1,698.50 in Mumbai, Rs 1,859 in Kolkata and Rs 1911 in Chennai.

Before this, in April 2024, ahead of the Lok Sabha Elections 2024, the government-owned Oil Marketing Companines (OMCs) had cut prices as well. That time, prices were reduced by Rs 30.50.

Despite the price cut, cylinder prices still remain higher in last six months: 

Despite the price cuts, a 19 kg LPG cylinder remains costlier by Rs 52.5 as compared to six months ago levels . This is because, fuel retailers have revised prices several times in as many days. Sometimes prices were increased while other times prices were trimmed. On net basis, cylinder prices still remain higher by Rs 52.20 as compared to six month ago levels.

First, OMCs hiked prices in November 2023, then, again prices were reduced later on. In December, there was a fresh hike followed by a marginal cut on January 1, 2024. Then, again retailers hiked prices consecutively in February and March 2024 before fresh cuts in the subsequent two months. So, if we adjust all these price revisions, a commercial cylinder would currently cost Rs 52.50 more as compared to November 2023 levels.

Commercial cylinders are used in hotels and restaurants. So, after the fresh price cut, these business establishments may pass on the reduced price benefits to the end consumers. In that case, food bills may deflate in coming times.

While, on the other hand, the price of a 14.2 kg cooking cylinder used by households was recently reduced and it costs Rs 803. State-owned OMCs Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) revise cooking gas prices on the 1st of every month, based on the average international price in the previous month.

Petrol and diesel prices on the other hand was also reduced in March 2024 by Rs 2 per litre. Petrol currently costs Rs 94.72 per litre in the national capital, and diesel comes for Rs 87.62 per litre. State-owned fuel retailers are supposed to revise petrol and diesel prices daily, based on a 15-day rolling average of benchmark international fuel prices.