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01 Oct 2017

LPG costlier by Rs 1.50/cylinder, jet fuel price by 6%

October's LPG and ATF price revisions

October's LPG and aviation turbine fuel (ATF) price revision saw both products getting costlier.

ATF prices saw a steep 6% hike, going from Rs. 50,020 per kilolitre (kl) previously to Rs. 53,045 per kl. This is the third consecutive ATF price hike.

Meanwhile, LPG saw an increase of Rs. 1.50 per cylinder, the fifth price hike since May.

In context

October's LPG and ATF price revisions

The doctrine of monthly LPG and ATF price revisions

As per government directives, state-owned oil firms revise prices of LPG and ATF on the 1st of every month depending on average oil prices and foreign exchange rates of the previous months.

Subsidized LPG

The government's incremental LPG pricing policy

In July 2016, the government implemented a policy of monthly price increases for subsidized LPG cylinders to eliminate subsidies by March 2018.

While the stipulated monthly price increase was previously Rs. 2 per cylinder, it was raised to Rs. 4 per cylinder this July.

Subsequently, LPG cylinders saw hikes of Rs. 2.31 in August, followed by Rs. 7 in September to compensate for August.

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The cumulative effect of the government's incremental pricing policy

Since the government's incremental pricing policy came into effect in July 2016, subsidized LPG cylinders have seen an increase of over Rs. 69.50 per cylinder, going from Rs. 419.18 per cylinder in June 2016 to today's rate of Rs. 488.68.

Non-subsidized LPG

Non-subsidized LPG cylinders also see price hike

Every household is entitled to 12 14.2 kg LPG cylinders at subsidized rates per year. Requirements beyond that have to be purchased at market prices.

October's price revision also saw non-subsidized LPG prices go up by Rs. 1.50 i.e. from Rs. 597.50 to Rs. 599.

The last hike on 1st September had seen non-subsidized LPG prices shoot up by Rs. 73.50.

The number of subsidized and non-subsidized LPG users in India

There are over 18.11 crore customers of subsidized LPG cylinders in India, including 3 crore poor women who were given free LPG connections over the last year under the Pradhan Mantri Ujjwala Yojana. An additional 2.66 crore customers use non-subsidized LPG too.

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