The price of a 14.2 kg cylinder has skyrocketed to ₹1,053 in July 2022. Though a subsidy of ₹200 per cylinder was recently announced for the Pradhan Mantri Ujjwala Yojana beneficiaries, the subsidised rate of ₹853 is still double the amount paid in 2015. In fact, the government’s expenditure on LPG subsides in FY22 has crashed to just ₹242 crores. The steep rise in retail gas prices is also due to the spiralling international LPG prices which now form 80-90% of the retail cylinder price. The price surge has pushed consumers to lower the number of LPG refills with 5% of the PMUY beneficiaries refilling just once per year in FY22
Thousand and counting
Between May 2020 and May 2022, no subsidy was declared by the government for domestic cylinders in Delhi. Following a sharp rise in non-subsidised LPG prices, consumers have been paying higher market rates, which in May 2022 averaged at ₹999.5 per 14.2 kg cylinder in Delhi.
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International price
Currently, over 80-90% of the LPG retail price in Delhi is determined by the international Free On Board (FOB) price of LPG. FOB is the weighted average of Saudi Aramco contract price for Butane (60%) and Propane (40%). Apart from base price, factors like import charges, bottling charges, freight, delivery charges, GST and distributor commission determine the price of LPG
Subsidy subsides
The chart depicts the amount of subsidy on LPG given by the Central government during each of the last five years. The amount has crashed to ₹242 crore in FY22 from ₹37,209 crore in FY19
Fewer refills
The graph shows the % of PMUY customers who refilled their LPG once, twice and thrice in FY21 and FY22
Source: Lok Sabha, PPAC
Also read: Data | How effective has the Pradhan Mantri Ujjwala Yojana been
Published - July 27, 2022 05:07 pm IST
