New Delhi, Nov 1 : The government late on Thursday night put on hold the hike of Rs 26.50 in the price of non-subsidized cooking gas (LPG) cylinder.
A late night press release said, the price hike has been put on hold.
Earlier in the day, the price of non-subsidised cooking gas (LPG), which consumers buy beyond the cheaper quota of six cylinders, was hiked by Rs 26.50 to Rs 922 per unit on firming international rates.
The 14.2-kg cooking gas cylinder that consumers buy beyond their entitled six bottles at subsidised rates, would have now cost Rs 922, up from Rs 895.50 in Delhi, according to Indian Oil Corp, the nation's largest fuel retailer.
The government had in September restricted the supply of subsidised domestic LPG cylinders to six per household in a year.
Any requirement above this will have to be bought at market rate, which is more than double the subsidised price of Rs 410.42 per cylinder in Delhi, it was earlier announced.
State-owned oil firms revise rates of non-subsidised LPG on 1st of every month based on the average imported cost and rupee-US dollar rate during the previous month.
There is no restriction on the number of non-subsidised cylinders that a consumer buys beyond the six subsidised bottles.
The price of commercial 14.2-kg LPG cylinder in Delhi was set to be Rs 1,105.5, while that of a 19-kg bottle would be Rs 1,551.
A commercial or non-domestic cylinder was previously priced at Rs 1,075 per 14.2-kg bottle. Similarly, the 19-kg cylinder was priced at Rs 1,536.5.
Rates of non-subsidised 14.2-kg cylinder and those of commercial bottles of the same size differ because the government has granted exemption from customs and excise duty on non-subsidised LPG cylinders only for domestic consumption to reduce the price burden on the common man.
Under the new scheme, oil firms will declare monthly prices of non-subsidised 14.2-kg domestic LPG cylinders for supplies to households as per landed cost on import parity basis.
That is based on the average FOB value, premium/ discounts prevailing in the international market, besides US dollar-rupee exchange rate during the previous month.
While subsidised cylinders will continue to be available at Rs 410.42 per cylinder (in Delhi), the market rate of non- subsidised LPG cylinders will be notified on a monthly basis by fuel retailers.
“With this, the price of the non-subsidised domestic LPG cylinder will move up and down every month based on the price of LPG in the international market, which in turn is also determined by global demand-supply situations,” IOC said.
At present, the international LPG market is tight on the supply side owing to increased global demand since LPG is also used in several markets as a winter heating fuel.
However, when supplies improve and prices fall, the benefit would be passed on to the consumers.