Oil majors have hiked liquefied petroleum gas (LPG) prices from March 1, which is part of the monthly revision of prices. Now, a domestic non-subsidised cylinder in Chennai costs ₹835. It was ₹810 per cylinder after the third price revision last month.
The prices of 5kg and 19 kg commercial cylinders too have gone up. They are now ₹308 as against ₹299 and ₹1,730.5 as against ₹1,634.5 per cylinder last month.
Oil industry experts explained that there is most likely to be one more hike this month. LPG prices have been on the rise with international demand for them going up.
The subsidy amount, which is given to eligible customers (those with income of less than ₹10 lakh per annum), however remains ₹25 per cylinder in Chennai. This amount varies from one bottling plant to another.
“The subsidy amount is being provided to customers so that they can be insulated from the volatility of LPG prices in the international market. In 2020, it was ₹263 per cylinder. Sometime in mid 2020, it went to the present double digit figure. Consumers, at least those in urban areas, have no other option but to buy LPG cylinders at whatever rates they are sold,” explained an oil industry expert.
Of this ₹835, ₹733.93 is the basic rate, which includes bottling charges, ocean freight, inland transportation charges for the cylinder, ₹19.88 goes to the State government as Goods and Services Tax and an equal amount to the Central government. The distributor gets ₹61.31 as commission, which goes towards delivery charges, that includes picking up the cylinder from the bottling plant and delivering it to the consumer, establishment costs such as salaries, rent, power and telephone bills.
Consumer activist T. Sadagopan said that the subsidy component was not serving the purpose that it should.
“People are suffering due to increasing rates and the government seems to be watching it without taking any steps to reduce the burden of the common man. When they need it, they conveniently blame the oil companies for the pricing. Between these two, they are making fools of the people,” he said.