A month after cutting the price of LPG (liquefied petroleum gas) cylinders by over 100, state-run fuel retailers today effected another big price cut. The price of non-subsidised LPG cooking gas will be reduced by 62.50 per 14.2 kg cylinder in New Delhi, and 62 in Mumbai and Chennai.

The new rates are with effect from today as LPG prices are revised on the first day of every month. The price cut comes on the back of LPG price cut in the international market and the dollar-rupee exchange rate.

"Accordingly, the upfront cash payment by the consumers of domestic LPG will also reduce by 62.50 per cylinder. Domestic LPG consumers will now be required to make upfront cash payment of 574.50 only per 14.2 Kg cylinder in August 2019 in place of 637 per cylinder for July 2019," Indian Oil said in a statement.

A non-subsidised LPG cylinder now costs 574.50 in Delhi, 601 in Kolkata, 546.50 in Mumbai and 590.50 in Chennai.

All LPG consumers have to buy the fuel at market price. The government, however, subsidizes 12 cylinders of 14.2kg 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 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 subsidize a part of the price, but tax will have to be paid at market rates. This leads to an increase or decrease in the price of subsidised cylinders.