LPG Prices Slashed (August 1, 2022): The price of a commercial LPG cylinder was reduced on Monday, in line with weakening international rates. The price of liquefied petroleum gas (LPG) used in commercial cylinders was cut by Rs 36 per 19-kg cylinder. Following the latest price reduction, the 19-kg commercial cylinder will now cost Rs 1,976.50 in Delhi, down from Rs 2,012.50 earlier, according to the data available on the Indian Oil Corporation’s (IOC) website. This price revision will benefit hotels, restaurants and other business establishments that use gas cylinders. However, there is no relief for households as there has been no change in the price of domestic LPG cylinders.
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In Mumbai, the 19-kg LPG cylinder will now cost Rs 1,936.50 instead of Rs 1,972.50. In Kolkata, the 19-kg cylinder will be available at Rs 2,095.50, down from Rs 2,132 earlier. In Chennai, it will now be priced at Rs 2,141, while in Bengaluru, the rate has come down to Rs 2,063.50. In Hyderabad, the price has been slashed to Rs 2,197.50. Rates differ from state to state depending on the local VAT. Note that this is the fourth price cut on the LPG gas cylinders in India in the last four months. Earlier in June, the central government slashed 19- kg commercial LPG cylinder’s price by Rs 135.
Meanwhile, domestic LPG cylinders are still burning a hole people’s pockets. The price of a 14.2-kg domestic LPG cylinder was hiked by Rs 50 last month. Consumers who were paying Rs 1,003.50 for a 14.2-kg cylinder in Delhi are now paying Rs 1,053.50. In Kolkata, rates went up from Rs 1,029 per cylinder to Rs 1,079. In Mumbai and Chennai, the domestic 14.2-kg cylinder is now priced at Rs 1,052. 50 and Rs 1,068. 50 respectively.
Note that in India, the oil marketing companies (OMCs) sell 14.2-kg cylinders to domestic households at the prices prevalent in the open market, but the government provides subsidies for 12 such cylinders to beneficiaries of Pradhan Mantri Ujjwala Yojana each year through a direct benefit transfer to their bank accounts.
Jet fuel prices slashed
Jet fuel (ATF) prices were also slashed on Monday by the steepest ever 12 per cent, the second reduction in as many weeks, on softening international oil prices amid recessionary fears. ATF prices were cut by Rs 16,232.36 per kilolitre, or 11.75%, to Rs 121,915.57 per kl in the national capital. This is the steepest ever reduction in rates and follows a Rs 3,084.94 per kl (2.2%) reduction effected on July 16. Note that ATF prices are revised on the 1st and 16th of every month, based on rates of benchmark international oil rates in the previous fortnight.
Besides the two reductions in jet fuel rates on July 16 and August 1, ATF prices were cut by a marginal 1.3% (Rs 1,563.97 per kl) on June 1. Apart from these three cuts, ATF prices have been on the rise throughout 2022. In all, rates have been increased 11 times since the start of this year which led to rates almost doubling in six months. Prior to the two back-to-back reductions, ATF prices surged by 91% (Rs 67,210.46 per kl) since January 1. With jet fuel making up almost 40 per cent of the operating cost of an airline, the increase in ATF prices had resulted in a rise in the cost of flying.
Meanwhile, oil prices dropped early on Monday as investors braced for this week’s meeting of officials from OPEC and other top producers on supply adjustments. Brent crude futures dropped 63 cents, or 0.6%, to $103.34 a barrel in the US. West Texas Intermediate crude was at $97.87 a barrel, down 75 cents, or 0.7%, after hitting a session low of $97.55 when trading commenced in Asia.