New Delhi: State-run oil marketing companies on Tuesday raised prices of commercial LPG cylinders by around ₹10 per cylinder across key metro cities. Jet fuel prices for domestic airlines have also been increased by over 5%.
In the national capital, the price of the 19-kg commercial cylinder has been raised by ₹9.5 to ₹2,747.50 per cylinder. The price of a 5-kg FTL (free trade LPG) cylinder, which comes under the commercial category, has also increased by ₹2 to ₹764. The price hike comes after two consecutive price cuts in July and August. In July, prices of 19-kg commercial LPG were reduced by ₹183.50, and in August, it was further cut by ₹192.
In Kolkata, Mumbai and Chennai, commercial LPG prices now stand at ₹2,884.00, ₹2,701.00 and ₹2,916.50 per cylinder, up by ₹11.5, ₹9.5 and ₹10.5, respectively, from August.
Rise in international prices
The increase follows a rise in international LPG prices. Over the past one month, the benchmark Saudi Contract Prices (CP) for LPG increased by $5 per metric tonne for propane and $20 per metric tonne for butane.
LPG supplies have been among the areas most affected by the war because India relied on West Asia for about 90% of its cooking gas imports before the conflict. Qatar, Saudi Arabia, the UAE and Kuwait were the main suppliers. During the conflict, the US emerged as India's largest LPG supplier.
India imports about 65% of its annual LPG requirement of 33 million tonnes, resulting in an import bill of nearly $11 billion. Domestic LPG prices, however, have been kept unchanged.
Rising consumption
Data from the Petroleum Planning & Analysis Cell (PPAC) show that India's LPG consumption rose to a six-month high in July, reaching around 2.37 million tonnes (mt) on a provisional basis, up 8% month-on-month. However, usage was down by almost 16% annually.
The petroleum and natural gas ministry recently informed Parliament that the state-run oil marketing companies (OMC) have accumulated more than ₹59,000 crore in under-recoveries from the sale of domestic cooking gas as of 31 July, up from around ₹51,000 crore at the end of June, as the war in West Asia disrupted LPG supplies and pushed up global prices.
Meanwhile, OMCs increased jet fuel prices for domestic airlines in the national capital by ₹6.28 per litre, or 5.46%, to ₹121.28 per litre.
ATF prices were raised by ₹5 per litre in August this year after a reduction in July. The continued increase in jet fuel prices is significant for the aviation sector because fuel accounts for roughly 40% of an airline’s overall operating costs.
