Reduced LPG prices in the international market and strengthening of the US dollar and Indian Rupee exchange rate has led to the reduction in LPG cylinders for domestic consumers in Delhi. The cylinder price has been reduced by Rs 120.50 for unsubsidised consumers and by Rs 5.91 for subsidised consumers.
This is the second straight monthly reduction in the LPG rate. On 1st December, subsidised LPG price was cut by Rs 6.52 per bottle after six consecutive monthly price hikes which amounted to Rs 14.13.
The Indian Oil Corporation (IOC), India’s largest fuel retailer, in a statement issued last night said that the LPG cylinder will cost Rs 494.99 in Delhi from midnight as against Rs 500.90. The non-subsidised or market-priced LPG cylinder rates have been cut by Rs 120.50 per cylinder and will cost Rs 689 owing to the fall in the LPG in the international market and strengthening of the US dollar – Indian Rupee exchange rate. On 1st December, the price of unsubsidised LPG was cut by Rs 133 per bottle.
The subsidy amount, which gets credited directly in the bank accounts of the consumers, depends largely on the average international LPG and foreign exchange rate.
As per tax rules, the GST on LPG has to be calculated at the market rate of the fuel and hence, while the price of the LPG may get subsidised, the taxation on the same needs to be paid. The fall in the market price will lead to lower tax incidence which has eventually brought down the prices. This also brings down the subsidy amount.