Security deposit for new LPG connections raised

New Delhi, Jan 25 | Updated: Jan 26 2005, 05:30am hrs
The government has raised the security deposit paid by consumers for new LPG connection to Rs 850 per cylinder following higher prices paid by the distributors in procuring cylinders. Orders for increasing security deposit from Rs 650 per cylinder to Rs 850 per cylinder were issued last week, a top government official said.

It was lowered from Rs 900 to Rs 700 per cylinder in February 2002 based on cylinder procurement price of Rs 690-750 per cylinder. It was further reduced to Rs 650 per cylinder in March 2003, as procurement price fell to Rs 550 during mid-2003.

The decision to raise LPG cylinder deposit follows sharp rise in steel prices and some see it as a bold move, particularly in view of assembly elections in Bihar, Jharkhand and Haryana.

The official said the move follows a representation from the oil industry that security deposit be revised annually based on the average annual procurement price of a cylinder.