The Indian Oil Corporation (IOC) on Thursday in New Delhi imposed a 25 rupee increase in the cost of unsubsidized liquefied petroleum gas (LPG) cylinders across the country. For the first interval in five months, the cost of non-subsidized LPG cylinders has increased.
With this hike, a 14.2 kg unsubsidized LPG cylinder will cost 644 Croatian rupees in New Delhi in December. It will cost 670.25 rupees in Calcutta and 644 rupees in Mumbai. In Chennai, 14.2 kg of LPG will cost 660 rupees, now that Indian Oil has stated that it offers LPG below the Indane model.
Cost Of LPG Cylinders
The cost of LPG cylinders will be decided by the state-owned oil company and will be reviewed monthly. The tariff was last revised in July. However, LPG cylinders’ cost was revised in December, as the National Oil Company is under constant pressure due to the coronavirus pandemic.
In September of the same year, the federal government again removed the subsidy for home cooking gasoline due to the ongoing coronavirus pandemic. As a result of this development, the Union Government can save more than Rs. 20,000 for the LPG subsidy for FY21. It could be significant given the Union Government’s pressure to increase spending on the Covid reduction program 19.
The federal government has allotted Rs 40,915 crore as petroleum subsidy for FY21, a 6 percent enhance from Rs 38,569 crore allotted for the final fiscal. The allocation for LPG subsidy has been elevated to Rs 37,256.21 crore for the present 12 months. However, the federal government had to attract nearly Rs 1,900 crore from the subsidy provisions to this point within the first quarter interval.
In February 2021, the cost of LPG tripled. The increase in LPG prices comes when the cost of petrol and diesel is at a record high of four meters. Oil advertising companies increased the price of gasoline in all subways in the context of soaring international crude oil prices. Normally, payments for non-subsidized LPG cylinders are reviewed monthly, and any changes are made on the first day of the month. The cost of cooking gas has been borne in many parts of the country due to local tax changes.
The national oil advertising company determines LPG cylinders’ national cost for each kitchen and industry. Under these guidelines, the federal government subsidizes 12 14.2 kg cylinders per household every 12 months.
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Customers are required to purchase additional LPG cylinders as needed, based primarily on market value. The federal government’s amount of subsidy for the 12 additional allowances each year varies from month to month. The LPG subsidy is generally determined by a composition similar to that of crude Oil and international opportunity costs.