LPG Cylinder Price: There is a secret of Rs 700 hidden in every cylinder of LPG gas, will you be shocked to know the truth? Is the gas cylinder in your house also running on heavy subsidy? If you understand the mathematics behind the gas cylinder, you will be stunned?
LPG Cylinder Real Cost: The price of domestic LPG cylinder has been increased by Rs 29, and the new rates have come into effect from Sunday. After this increase, the price of 14.2 kg domestic LPG cylinder in Delhi has increased from Rs 913 to Rs 942. Earlier on March 7 also, the cylinder price was increased by Rs 60. But the government and oil companies say that they are still incurring a loss of about Rs 700 on every cylinder.
Is the real price of domestic LPG cylinder shocking?
According to the government report, the actual cost of delivering the 14.2 kg domestic LPG cylinder you use has now increased to more than Rs 1600. But you might not find it expensive, because the government and government oil companies are themselves incurring a loss of about Rs 700 on every cylinder. This surge in prices has come due to the increase in the contract price (CP) of Saudi Aramco. LPG prices have increased by about 46% since February due to the blockage in the Strait of Hormuz.
How did the supply cost of the cylinder reach Rs 1600?
- According to the Ministry of Petroleum and Natural Gas, the Saudi CP for propane and butane (50:50 mix) in February was $542.50 per tonne. But after difficulties in exports from the Middle East Gulf of Hormuz, the price rose to $775 per tonne in April and reached $790 per tonne in June.
- During the same period, CP of propane increased by 39% and that of butane by 52%. Due to increase in the cost of gas coming from abroad, the supply cost of domestic cylinder crossed Rs 1600.
The cheapest cooking gas in the world for Indian families?
Despite this huge surge, Indian households are getting the cheapest cooking gas in the world. A common consumer in Delhi pays Rs 942 for a cylinder. Which is about Rs 700 less than the real market price. At the same time, the beneficiaries of PMUY Ujjwala scheme get a direct subsidy of Rs 300 on the first four refills every year, due to which the cylinder costs them only Rs 642. This is equal to the average annual consumption of a Ujjwala family. Thus, common consumers are paying 45% less than the international price and Ujjwala beneficiaries are paying almost 60% less.
Why are the prices of LPG gas increasing?
- Due to the crisis in West Asia, the prices of domestic LPG cylinders have been increased by Rs 29 from Sunday. The ministry said that by the end of the financial year 2025-26, the total loss on domestic LPG will reach Rs 60,000 crore, which was Rs 41,338 crore last year. To compensate for this loss, the Union Cabinet has approved compensation of Rs 30,000 crore to oil companies. The ministry clarified that the subsidy of Rs 300 given to Ujjwala customers is in addition to this loss and more than 10.58 crore connections are benefiting from it.
- Even during the blockage in Hormuz, there was no shortage of supplies in the country. India was one of the few countries that maintained the movement of energy cargo. To compensate for the shortfall in imports, domestic LPG production was increased by more than 60% to 52 TMT. Gas was also procured from countries like America, Canada and Algeria. Also, OTP-based delivery verification was increased to about 90% to prevent black marketing of subsidized cylinders.
How much is gas available from Pakistan to America?
The result is that cylinder prices in India are much lower than neighboring countries and developed economies. A cylinder costs Rs 1,046 in Pakistan, Rs 1,207 in Nepal, Rs 1,225 in Bangladesh, Rs 1,241 in Sri Lanka, Rs 1,755 in America, Rs 1,765 in Australia and Rs 2,411 in Canada. The ministry has appealed to consumers to adopt energy-saving cooking methods to conserve this subsidized resource.