LPG price hike after commission rise to dealers
Posted on: 10/Nov/2018 11:37:39 AM
The price of domestic cooking fuel supply run by government in the form of Liquefied Petroleum Gas (LPG) was hike recently by Rs 2 per cylinder. This sudden increase in the price of LPG cylinder is the result of government’s decision to increase the commission paid to the LPG dealers. Irrespective of the total expenditure and global petroleum price fixations the inside dealings between the government and the dealers hiked the prices for the customers consuming LPG cylinders for their livelihood.
According to the latest report from one of the state owned fuel retailer the price of 14.2 Kg LPG cylinder in Delhi is Rs 507.42 against the previous rate of Rs 505.34. The order passed by the Oil Ministry raising the LPG dealer’s commission based on the total distribution and other economic criteria lead to the hike said the sources of the state owned department related to the oil and petroleum dealers. The distributor’s commission for 14.2 Kg and 5 kg cylinder was fixed as Rs 48.89 and Rs 24.20 respectively in the month of September 2017.
The transportation cost dealt with the petrol/diesel price hike and other financial considerations of the distributors requested government to increase the commission on single cylinder basis. Now the order has been passed rising the commission on an interim measure.
The recent hike of the LPG cylinder prices is the second increase in the same month. Earlier the price went up by Rs 2.94 per cylinder owing to the tax component and base price increase.
GST and base price fluctuation has caused many price hike of the LPG cylinders from the month of June. Cumulative increase in the price of the fuel was witnessed throughout the year 2018 risen by Rs 16.21. Now in Chennai the price of a 14.2 Kg cylinder cost Rs 495.39 whereas in Kolkata it is fixed as Rs 510.70. In Mumbai the price of 14.2 Kg cylinder is Rs 505.05, differing largely based on regions, transportation cost and local tax calculation.
Customers directly collecting the cylinders from the distributor premises will not be charged for delivery said the sources of LPG dealers. However the government subsidizes 12 cylinder of 14.2 Kg each per households providing the amount directly to the bank accounts of users for a given year. The subsidy amount varies month to month depending on the international benchmark of LPG rate and foreign exchange rate concerned with the Indian economy on an average basis.
If the international rates moves up base on the total petroleum price fluctuation then the government increased the prices based on GST and new tax rules. A part of the price may be subsidized based on the procedure but the price fixations are always subjected to world market changes. On the very start of November month the non-subsidized or market prices of LPG went up by Rs 60 per cylinder to Rs 939 for a 14.2 Kg cylinder. But the recent hike is completely state run factor of increasing the dealer’s commission.
