The government on Friday reduced the price of non-subsidised liquefied petroleum gas (LPG) by a record Rs 162.50 per cylinder on the back of a slump in benchmark international rates.
This is the third straight monthly reduction in rates of LPG or market-priced cooking gas, which users who have given up subsidy buy.
The crude oil market is going through a rough patch due decline in the storage capacity as supply continues and demand remains nearly standstill because of the coronavirus caused global lockdowns.
Last month, Benchmark Brent crude oil dropped to a two-decade low of $15.98 a barrel, but has rebounded since to $26.43 a barrel on Friday.
In Delhi, the price of non-subsidised 14.2-kg LPG cylinder is at Rs 581.50, down from Thursday’s rates of Rs 744.
This is the steepest reduction in non-subsidised cooking gas prices ever. It beats Rs 150.5 per cylinder cut effected in January 2019. Also, this is the third straight monthly reduction in price on the back of falling international rates. The cut comes on the back of Rs 61.50 per cylinder reduction in April and Rs 53 cut in March.
In three reductions, the price of non-subsidised cooking gas has been cut by Rs 277 per 14.2-kg cylinder. It more than negates the massive Rs 144.5 per cylinder hike in rates introduced in February.
In Mumbai, the non-subsidised cooking gas price was reduced to Rs 579 per cylinder from Rs 714.50.
In Kolkata, non-subsidised cooking gas rates have been cut by Rs 190 to Rs 584.50.
Similarly in Chennai, the new rates of LPG cylinders have come down to Rs 569.50.
Domestic LPG users are entitled to buy 12 bottles of 14.2 kg each at subsidised rates in a year.
On the other hand, the price of 19-kg LPG cylinders, used by commercial establishment, has also been cut to Rs 1,029.50 from Rs 1,285, the notification said.
State-owned oil marketing companies revise the price of cooking gas on the first day of every month based on average of benchmark fuel in the international market and foreign exchange rate.
Cooking gas is available only at market price across the country. Eligible users, however, get a subsidy in their bank accounts for buying LPG cylinders at below-market rates. This subsidy is only applicable on 12 cylinders in a year.