On the eve of new year 2019, to the joy of consumers, LPG cylinder prices have been cut by a massive amount. In a Modi government gift, prices of domestic cooking gas (LPG) cylinders were cut by Rs 5.91 per cylinder. This is the second straight reduction in a month’s time. A 14.2-kg subsidised LPG cylinder will cost Rs 494.99 in the national capital from midnight tonight as against Rs 500.90 currently, Indian Oil Corp (IOC), the country’s largest fuel retailer, said in a statement.
Also, according to the IOC statement, non-subsidised or market priced LPG cylinder rates have been cut by a steep Rs 120.50 per cylinder too. Reason behind the move to cut the rates was made clear by the statement – “due to fall in price of LPG in international market and strengthening of US dollar-rupee exchange rate.”
Earlier on December 1, subsidised LPG price was cut by Rs 6.52 per cylinder. That price cut was done after six consecutive monthly hikes in LPG rates since June. These two price reductions had negated the Rs 14.13 per cylinder hike in rates between June and November.
In the wake of this price reduction, the cylinder will now cost Rs 689 per 14.2-kg in Delhi. Notably, price of non-subsidised LPG was cut by Rs 133 per bottle on December 1.
All LPG consumers have to buy the fuel at market price, but the government subsidises 12 cylinders of 14.2-kg each per households in a year by providing the subsidy amount directly in bank accounts of users.
The subsidy amount varies from month to month depending on the changes in the average international benchmark LPG rate and foreign exchange rate.
The government extends higher subsidy when international rates move up, and when the rates come down, subsidy is cut.