State-owned oil marketing companies on Saturday cut the price of commercial cooking gas by a steep ₹192 per 19-kg cylinder, providing relief to hotels and restaurants, even as aviation turbine fuel rates were increased by ₹5 per litre in line with divergent international benchmark prices.
A 19-kg commercial LPG cylinder will now cost ₹2,738 in Delhi, compared with ₹2,930 earlier. The price of a 5-kg market-priced LPG cylinder has also been reduced by ₹46.50 to ₹762 from ₹808.50.
Second Straight Price Reduction
This is the second consecutive monthly reduction in commercial LPG prices. Oil companies had cut the price of a 19-kg cylinder by ₹183.50 on July 1. The two revisions have lowered the rate by ₹375.50 in two months, after the West Asia conflict pushed LPG prices to record levels in June.
Commercial LPG prices had risen by ₹1,373 per cylinder between February and June, climbing from ₹1,740.50 before the conflict to ₹3,113.50 in June. Despite the latest reductions, the price remains ₹997.50 higher than the February level.
Aviation Fuel Costs
In contrast, ATF prices were raised to ₹115 per litre from ₹110 per litre. The increase reverses a reduction of a similar proportion implemented on July 1 and could raise operating costs for airlines, for which fuel is a major expense.
Commercial LPG and ATF prices are revised on the first day of every month based on movements in international benchmark rates and foreign exchange. Retail prices vary across states because of local levies, including value-added tax.
Prices of domestic LPG used by households remained unchanged at ₹942 per 14.2-kg cylinder. Domestic cooking gas rates were last increased by ₹29 per cylinder on June 7, after a ₹60 hike in March as supply disruptions following the West Asia crisis drove up global energy prices.
In an interaction with reporters, Indian Oil Corporation Chairman A S Sahney said on Friday that oil companies were incurring an under-recovery of ₹503 on every 14.2-kg domestic LPG cylinder in the month of July.
The continued under-recovery means the reduction has been restricted to market-priced commercial LPG, while household cylinder rates have been held unchanged.
Petrol and diesel prices were also left unchanged on Saturday. Retail rates of both fuels had been raised by about ₹7.50 per litre each in May as oil marketing companies responded to higher international energy costs.