Cooking gas LPG price was hiked by a steep ₹144.5 per cylinder on Wednesday due to spurt in benchmark global rates of the fuel.
But to insulate domestic users, the government almost doubled the subsidy it provides on the fuel to keep per cylinder outgo almost unchanged.
LPG price was increased to ₹858.50 per 14.2 kg cylinder from ₹714 previously, according to a price notification of state-owned oil firms.
This is the steepest hike in rates since January 2014 when prices had gone up by ₹220 per cylinder to ₹1,241.
Domestic LPG users, who are entitled to buy 12 bottles of 14.2-kg each at subsidised rates in a year, will get more subsidy.
The government subsidy payout to domestic users has been increased from ₹153.86 per cylinder to ₹291.48, industry officials said.
For Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries, the subsidy has increased from ₹174.86 to ₹312.48 per cylinder.
After accounting for the subsidy that is paid directly into the bank accounts of LPG users, a 14.2-kg cylinder would cost ₹567.02 for domestic users and ₹546.02 for PMUY users.
The government gave out eight crore free LPG connections to poor women under PMUY to increase coverage of environment-friendly fuel in kitchens.
Normally, LPG rates are revised on the 1st of every month but this time it took almost two weeks for the revision to take place — a phenomenon which industry officials said was due to approvals needed for such a big jump in subsidy outgo.
Others said the decision to defer the increase could have been because of assembly elections in Delhi. Delhi voted on February 8.