Who will bear the burden of price cut in LPG gas cylinder? Petroleum companies or government – who will bear the cost of reduction in the price of gas cylinder?

After this, the price of 14.2 kg LPG cylinder has come down from Rs 1,103 to Rs 903 in the national capital. Adding the subsidy of Rs 200 per cylinder already released to Ujjwala beneficiaries will cost them Rs 703.

Government and industry sources said that state-owned oil companies Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) posted bumper earnings in the April-June quarter and continued to do so. Also, the price at which domestic LPG rates are fixed has been reduced from US$ 732 per tonne in March 2023 to US$ 385 in July this year.

He said that the rates have increased to USD 464 per tonne in August, but still oil companies have enough scope to cut LPG prices. Oil Minister Hardeep Singh Puri told a television channel on Wednesday that the three oil marketing companies, as good corporate citizens, cut prices and posted “very good profits” for the April-June quarter. He, however, did not give a direct answer to questions about the subsidy being given for the government’s decision. Sources said the price cut will be passed on to the oil companies and the government has not yet indicated any subsidy to them.

He also added that when there was a spurt in Saudi CP (LPG contract price) in March/April, all the three companies incurred losses. He said that this loss has not yet been compensated. An industry source said that if reduction in the benchmark rate was the only criterion for the price cut, then the cut should have gone in July. He indicated that the decision was political. LPG prices have shot up in the last few years and it has become a major election issue.