LPG price hiked by Rs 2.94 per cylinder

October 31, 2018 22:01

Subsidised cooking gas price Wednesday was hiked by Rs 2.94 per cylinder due to tax impact on the change in base price.

A 14.2-kg subsidised LPG cylinder will cost Rs 505.34 from midnight tonight as against Rs 502.40 now, Indian Oil Corp, the nation's biggest fuel retailer, said in a statement.

This is the sixth straight monthly increase in rates since June. In all rates have gone up by Rs 14.13 per cylinder since then.

All LPG consumers have to buy the fuel at market price. The government, however, subsidises 12 cylinders of 14.2-kg each per households in a year by providing the subsidy amount directly in bank accounts of users.

This subsidy amount varies from month to month depending on the changes in the average international benchmark LPG rate and foreign exchange rate.

When international rates move up, the government provides a higher subsidy. But as per tax rules, GST on LPG has to be calculated at the market rate of the fuel. The government may choose to subsidise a part of the price but tax will have to be paid at market rates.

This has led to an increase in price.

The non-subsidised or market price LPG rates have gone up by Rs 60 per cylinder to Rs 880. -- PTI

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