LPG price up second time in a month on higher GST impact

LPG price up second time in a month on higher GST impact

NEW DELHI: State-run fuel retailers have raised the price of domestic cooking gas cylinders by Rs 1.76 per cylinder, the second in a month, as they passed on the incremental increase in GST due to the rise in benchmark LPG rate and the rupee’s fall against the dollar.

Subsidised refills will now cost Rs 498.02 per cylinder in Delhi, considered by the oil ministry as the benchmark market, against Rs 496.26 at present. currently, a statement issued by Indian Oil Corp (IOC), the nation’s largest fuel retailer, said.

This is the second increase in the price of domestic subsidised cylinders due to the pass-through of increased GST, prompted by higher benchmark LPG rates. The price was raised by Rs 2.71 on July 1.

Consumers currently buy cylinders at market price and the government transfers the subsidy for 12 cylinders in a year directly into their bank account. The subsidy varies each month in tune with the change in average international benchmark rate for LPG and the rupee exchange rate.

The government raises the subsidy in step with the increase in benchmark LPG rates. But since GST on LPG is paid at the fuel’s market rate, the government decides to pass on the incremental increase.

For example, the price of domestic LPG cylinders in Delhi will actually rise by Rs 35.50 per cylinder after including higher GST to Rs 789.50. This increase comes on back of Rs 55.50 per cylinder hike in July. While the government will raise subsidy by Rs 33.74, the actual rise in benchmark rate, consumers will have to bear the Rs 1.76 increase in GST. Accordingly, the subsidy transfer in the customer’s bank account will go up to Rs 291.48 in August from Rs 257.74 per cylinder in July.

Oil firms revise LPG price on 1st of every month based on average benchmark price and foreign exchange rate in the previous month.

Source:- indiatimes