Cooking Gas Prices: The LPG gas prices are expected to rise further by Rs 100-15 per cylinder in 1 year. Sources said the government may give nod to state-run oil marketing companies to increase the price of subsidised LPG cylinder.

You may not have noticed it but the price of subsidised cooking gas rose by an average of Rs 10 per cylinder in the July-January period of current fiscal taking the price paid by the common man for fuel closer to market rates.

The good news is that with the developments in the past few months, the government is looking to completely eliminate oil subsidy by early FY22. But for consumers, the move would mean that their cooking gas price would shoot up by another Rs 100-150 per cylinder over the next one year.

Sources said that taking advantage of low oil prices, the government may give nod to state-run oil marketing companies to increase the price of subsidised LPG cylinder gradually so that entire subsidy paid under direct benefit transfer scheme (DBT) to eligible consumers is eliminated in one year’s time.

Already during July 2019-January 2020, the OMCs increased the price of subsidized LPG by Rs 63 per cylinder. At current global oil prices, if oil companies raise the rate of subsidized LPG cylinder (14.2 kg) by just about Rs 10 per cylinder per month, in 15 months time there would not be any need to extend Central support.

The price of a subsidised LPG cylinder (14.2 kg) currently works to around Rs 557 with the government providing Rs 157 as subsidy directly into the account of eligible consumers. The subsidy level may fall if oil prices slide further and remains below $60 a barrel in most parts of FY21.