LPG PRICES

Feb. 25, 2020

LPG prices, which are revised on a monthly basis, went up again. In February 2020 the rate for unsubsidised, 14.2 kg cylinders has risen by a steep ₹144.50 in Delhi, at ₹858.50 . In January 2020, a non-subsidised LPG cylinder cost ₹714 in Delhi. The recent price hike has been the sharpest since January 2014.

Methodology:

  • Domestic prices of liquefied petroleum gas (LPG) are based on a formula — the import parity price (IPP), which is based on international LPG prices.

  • Saudi Aramco’s LPG price acts as the benchmark for the IPP and includes the free-on-board price, ocean freight, customs duties, port dues and the like.

  • This dollar-denominated figure is converted into rupees before local costs — such as local freight, bottling charges, marketing costs and the GST — are added. This helps the government arrive at the retail selling price for LPG.

  • The government resets the LPG price every month, the decision being influenced by international prices and how the rupee has behaved against the dollar in the immediately preceding weeks. 

Source : The Hindu