In a significant move, the price of a commercial liquefied petroleum gas (LPG) cylinder has been increased by Rs 99.3, marking the biggest single hike in history. The revised price now takes the cost of a 19 kg commercial LPG cylinder to over Rs 3,000 in major cities across India.
Details of the Price Hike
The hike, effective from today, was announced by state-owned oil marketing companies. This is the steepest increase ever recorded for commercial LPG. The new prices vary slightly across different cities due to local taxes and freight charges. In Delhi, the price has gone up to Rs 3,002.5, while in Mumbai it is Rs 3,012.5. Kolkata and Chennai also saw similar increases.
Impact on Businesses
This price revision is expected to have a direct impact on businesses that rely heavily on commercial LPG, such as restaurants, hotels, and small-scale industries. Many establishments use LPG for cooking and heating, and the increased cost may lead to higher operational expenses. Some businesses may pass on the additional burden to consumers through increased prices of food and services.
Reason for the Hike
Oil companies attributed the hike to the increase in international LPG prices and the depreciation of the Indian rupee against the US dollar. India imports a significant portion of its LPG requirements, and global price fluctuations directly affect domestic rates. The government has not provided any subsidy on commercial LPG, unlike domestic cylinders, making commercial users vulnerable to market volatility.
Comparison with Domestic LPG
While domestic LPG cylinders have seen periodic price revisions, the increase for commercial cylinders has been more pronounced. Domestic LPG is subsidized by the government, and its price is relatively stable. In contrast, commercial LPG prices are market-determined and have risen sharply in recent months.
Reactions from Stakeholders
Industry bodies have expressed concern over the steep hike, urging the government to consider providing some relief. The Federation of Hotel and Restaurant Associations of India (FHRAI) stated that this will add to the already high input costs for the hospitality sector, which is still recovering from the pandemic. Consumer groups have also voiced worries about potential price inflation in food items.
In conclusion, the record increase in commercial LPG prices is set to affect a wide range of businesses and consumers. Stakeholders are watching closely for any government intervention to mitigate the impact.
