Reportedly cooking gas LPG price on wednesday was hiked by a steep Rs 144.5 per cylinder due to spurt in benchmark global rates of the fuel, but to insulate domestic users, the government almost doubled the subsidy it provides on the fuel to keep per cylinder outgo almost unchanged. Furthermore LPG price was increased to Rs 858.50 per 14.2 kg cylinder from Rs 714 previously, according to a price notification of state-owned oil firms.
Perhaps this is the steepest hike in rates since january 2014 when prices had gone up by Rs 220 per cylinder to Rs 1,241. Apparently domestic LPG users, who are entitled to buy 12 bottles of 14.2-kg each at subsidised rates in a year, will get more subsidy and the government subsidy payout to domestic users has been increased from Rs 153.86 per cylinder to Rs 291.48. Also for Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries, the subsidy has increased from Rs 174.86 to Rs 312.48 per cylinder.
Moreover after accounting for the subsidy that is paid directly into the bank accounts of LPG users, a 14.2-kg cylinder would cost Rs 567.02 for domestic users and Rs 546.02 for PMUY users and the government gave out 8 crore free LPG connections to poor women under PMUY to increase coverage of environment-friendly fuel in kitchens. Hence normally, LPG rates are revised on 1st of every month but this time it took almost two weeks for the revision to take place a phenomenon which industry officials said was due to approvals needed for such a big jump in subsidy outgo.