New Delhi, May 1 Subsidized cooking gas (LPG) price on Wednesday was climbed by 28 paisa for each barrel and now costs over Rs 82 more than the rate in 2014, when the BJP government came to control.
Also, Jet fuel (ATF) price was climbed by over 2.5 percent, the third straight month to month increase in rates on the back of firming global prices, according to a price notification issued by state-owned oil firms.
The cost of Aviation Turbine Fuel (ATF) was hiked by Rs 1,595.63 per kiloliter, or 2.5 percent, to Rs 65,067.85 per kl in the national capital.
The increase comes on the back of a Rs 677.1 per kl hike in rates affected from April 1, and a steep 8.1 percent (Rs 4,734.15 per kl) jump in prices on March
1.
LPG cost was hiked by Rs 0.28 per cylinder and that of non-sponsored gas by Rs 6 per bottle.
A 14.2-kg subsidised LPG cylinder will now cost Rs 496.14 in the national capital as against Rs 495.86 previously.
With this increase, the price of subsidised LPG has gone up by over 82 or about a fifth in last five years.
Subsidised LPG was priced at Rs 414 for every barrel in mid 2014.
Simultaneously, the cost of non-subsidised LPG was increased by Rs 6 per 14.2-kg cylinder to Rs 712.50.
This is the third straight increase in LPG rate.
Non-subsidised LPG is the gas that customer buys after exhausting their quota of 12 cylinders of 14.2-kg at sub-market or subsidised rates in a year.
The hike in ATF rates will add to the burden of cash strapped airlines that are already reeling under strain from merciless challenge in the sector.
LPG, just as ATF costs, are reconsidered on first of consistently dependent on the normal universal rate for benchmark fuel and remote conversion standard in the previous month.
Also, the price of kerosene sold through the public distribution system (PDS) was increased to Rs 31.13 per liter in Mumbai from Rs 30.87.
This is as per the 2016 choice to raise rates by 25 paise a liter consistently till sponsorship on the fuel is wiped out.
Delhi has been pronounced a lamp oil free state and oil organizations don't sell financed lamp fuel in the city.
Non-sponsored kerosene costs Rs 64,177.63 per kl (Rs 64.17 per liter) in the national capital.
Official sources stated, the rise in LPG price has been necessitated due to tax impact on the increased market rate of the fuel.
All LPG consumers 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. Also, when they come down, subsidy is cut.
According to tax rules, the goods and services tax on LPG must be determined at the market rate of the fuel. The legislature may choose to subsidise a part of the price but tax will have to be paid at market rates.
So, with the rise in market price or non-subsidised LPG price, the tax incidence on subsidised cooking fuel has also increased, leading to the current price hike.
