The price of LPG cylinders for domestic use in the country is likely to increase. Fuel companies will announce new LPG cylinder gas rates on June 1 tomorrow. The price of an LPG cylinder is expected to be more than Rs 1,100.
Fuel companies had twice raised LPG prices in May. Fuel companies had hiked prices by Rs 50 on May 7. It then hiked the price by Rs 3.5 on May 19. It has been increased by Rs 53.5 in May. Rising international gas prices are likely to push up prices in India as well.
At present the price of LPG cylinder for domestic use in Delhi is Rs. 1003, Rs. 1002.5 in Mumbai, Rs. 1029 in Kolkata and Rs. 1058 in Chennai. The price of a 19-kg LPG cylinder for commercial use was also hiked by Rs 102. The price of a commercial gas cylinder is more than Rs.2000
How are gas prices determined?
The price of LPG in the country is determined by the import parity price. This is called IPP. India supplies most of its gas through imports. Therefore IPP is also determined by the price in the international market. Gas prices in India are determined by the price of LPG from Saudi Arabia's Armaco. The price of LPG includes factors like gas price, customs duty, transportation cost, insurance etc.
These factors also have consequences
The price of gas in the international market affects the price of gas in the country. However, apart from that, the depreciation of the rupee against the dollar also affects the price of gas. The dollar is traded in international markets. Due to the depreciation of the dollar, India has to pay a higher price.