Beginning today (1 November), non-subsidised cooking gas cylinders have become expensive by Rs 76.50 in major metros of the country. The LPG price has increased for the third consecutive month which, while disturbing the budgets of ordinary citizens, is good for the overall economy, keeping in view the burden of subsidy (support price) on the exchequer.
LPG prices in different cities
From today onwards, you will have to pay Rs 681.50 for a 14.2 kg unsubsidised cylinder in Delhi. It will cost Rs 706 in Kolkata. In Mumbai and Chennai, the prices of a 14.2 kg unsubsidised cylinder are now Rs 651 and Rs 696 respectively. The price of a 19-kg cylinder has been increased to Rs 1,204 in Delhi. It has been priced at Rs 1,258 in Kolkata, Rs 1,151.50 in Mumbai and Rs 1,319 in Chennai.
In October last month, the price of LPG cylinder had increased. At that time, the non-subsidised gas cylinders in the major metros of the country became expensive by about Rs 15.
Since October, you were paying Rs 605 for a 14.2 kg unsubsidised cylinder in Delhi. It was priced at Rs 630 in Kolkata. In Mumbai and Chennai, the prices of 14.2 kg unsubsidised cylinders were Rs 574.50 and Rs 620 each respectively. The price of a 19-kg cylinder was Rs 1,085 in Delhi. It cost Rs 1,139.50 in Kolkata, Rs 1,032.50 in Mumbai and Rs 1,199 in Chennai.
In September, a 14.2 kg unsubsidised cylinder in Delhi was priced at Rs 590. It was priced at Rs 616.50 in Kolkata. In Mumbai and Chennai, the prices of a 14.2 kg unsubsidised cylinder were Rs 562 and 606.50 respectively. The price of a 19-kg cylinder was Rs 1,054.50 in Delhi. It was Rs 1,114.50 in Kolkata, Rs 1,008.50 in Mumbai and Rs 1,174.50 in Chennai.
Cost of keeping gas affordable
In India, LPG is predominantly used for cooking purposes. Most of the LPG in India is imported, and it is subsidised by the central government for Indian citizens. It is the second-largest consumer of liquefied petroleum gases in the world, with LPG consumption growing at an average rate of 8.4%. The increase in consumption is attributed to the BJP government’s Pradhan Mantri Ujjwala Yojana scheme.
The Union government provides a subsidy of Rs 1,600 to state-owned fuel retailers for every free LPG connection they provide to rural households.
In February, the government allocated Rs 32,989 crore as cooking gas subsidy for the financial year 2019-2020. Of this amount, Rs 29,500 crore would be transferred directly to the accounts of Ujjwala beneficiaries. A separate, additional Rs 2,724 crore go into LPG connections in poor households. Rs 674 crore is for an additional for the Northeast.
The total subsidy amount was then 62.64% higher than the Rs 20,283.18 crore worth of total LPG subsidy incurred during financial year 2018-2019.
As reported yesterday, the Narendra Modi government has already consumed more than 93% of the fiscal deficit it had targeted. To keep LPG affordable for all, subsidising the commodity further would only mean a greater fiscal deficit, to compensate for which would require higher tax collections that, in turn, will pinch the very consumers who may want cheaper gas connections.