LPG price hiked by Rs 1.76 per cylinder
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 providing the subsidy amount directly in bank accounts of users.Updated: Aug 01, 2018 01:08 IST
Subsidised cooking gas (LPG) price was on Tuesday hiked by Rs 1.76 per cylinder due to tax impact on the change in base price.
Subsidised LPG with effect from midnight will cost Rs 498.02 per cylinder in Delhi as against Rs 496.26 currently, a statement issued by Indian Oil Corp (IOC), the nation’s largest fuel retailer, said.
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 providing the subsidy amount directly in bank accounts of users.
This subsidy amount varies from month to month depending on the changes in average international benchmark LPG rate and foreign exchange rate.
When international rates move up, the government provides a higher subsidy. 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 increase in price.
“The increase is mainly on account of GST on the revised price of domestic non-subsidised LPG,” the statement said. Rates were last revised upward by Rs 2.71 on July 1.
Oil firms revise LPG price on 1st of every month based on average benchmark rate and foreign exchange rate in the previous month.
As a result of higher global rates, the price of non-subsidised LPG in Delhi will increase by Rs 35.50 per cylinder to Rs 789.5. This increase comes on back of Rs 55.50 per cylinder hike in July.
The balance Rs 33.74 (Rs 35.50 minus Rs 1.76) is being compensated to the customer by the increase in subsidy transfer to their bank account. Accordingly, the subsidy transfer in the customer’s bank account has been increased to Rs 291.48 in August from Rs 257.74 per cylinder in July.
“Thus, the domestic LPG customer is protected against the increase in international prices of LPG,” the statement said.