Union Government orders LPG prices to be hiked by Rs 4 per month

With an aim to eliminate all subsidies by March 2018, the Union Government has ordered state-run oil companies to raise subsidised cooking gas, LPG (liquefied petroleum gas), prices by four rupees per cylinder every month.

The information in this regard was provided in the Lok Sabha by Petroleum and Natural Gas Minister Dharmendra Pradhan on 31 July 2017. In a written reply, Pradhan informed that the government in its order dated 30 May 2017 has authorised the oil companies to increase the price by four rupees excluding tax per month. The order came into effect on 1 June 2017.

He said, it will be in effect till the reduction of government subsidy to 'nil', or till March 2018, till further orders, whichever is earliest.

Oil companies have raised rates twice since then, the last being on 1 July 2017 when rates were up by a steep Rs 32 per cylinder. This hike was because of the 30 May 2017 order as well as a reflection of hiked tax rates on it under the Goods and Services Tax regime. It was the steepest increase in six years.

The government had previously asked the Public sector oil marketing companies (OMCs), namely Indian Oil (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL), to raise rates of subsidised domestic LPG by Rs 2 per 14.2-kg cylinder per month (excluding VAT).

Every household is entitled to 12 cylinders of 14.2-kg each at subsidised rates in a year. Any requirement beyond that is to be purchased at market price.

Reports suggest that there are as many as 18.11 crore customers of subsidised LPG in India, it includes 2.5 crore poor women who were given free connections during the last one year under the Pradhan Mantri Ujjwala Yojna. There are another 2.66 crore users of non-subsidised cooking gas.