Domestic and commercial LPG cylinder prices hiked across India
What's the story
The prices of domestic and commercial LPG cylinders have been raised across the country starting Wednesday. The domestic LPG cylinder of 14.2 kg will now cost Rs. 1,103 in Delhi after a hike of Rs. 50. The price of the 19 kg-commercial LPG cylinder saw a whopping increase of Rs. 350, taking its retail price to Rs. 2,119.50.
Context
Why does this story matter?
This is the second increase in commercial LPG cylinders in 2023; the first was on January 1 at Rs 25. Notably, LPG cylinder prices increased four times last year. It was raised by Rs. 50 in March, Rs. 50 and Rs. 3.5 in May, and Rs. 50 again in July. The hikes come amid the Russia-Ukraine crisis, which has disrupted global crude oil prices.
Information
What are the revised prices
The 14.2 kg domestic LPG cylinder will now cost Rs. 1,102.50 in Mumbai, Rs. 1,118.59 in Chennai, and Rs. 1,129 in Kolkata. The new price of the 19 kg commercial LPG is Rs. 2,071.50 in Mumbai, Rs. 2,221.50 in Kolkata, and Rs. 1,917 in Chennai.
Calculations
How are LPG prices calculated
The formula used to calculate LPG prices is called Import Parity Price (IPP). The retail price of LPG is readjusted at the beginning of every month with respect to the global price of crude oil. The variation in prices is based on the Value Added Tax (VAT) and transportation cost of respective states, coupled with the price of crude oil in the global market.
Details
Oil prices jump 2% on hopes of China's economic rebound
Each household is entitled to 12 subsidized cylinders in a year while additional LPG cylinders have to be bought at market rates. Oil prices jumped nearly 2% on Tuesday, counteracting the losses of previous sessions. This was prompted by hopes of an economic rebound in China as opposed to worries concerning interest rate hikes in the United States, which would reduce consumption.