Use LPG cylinder at home? Price hiked to Rs 505.34, but there is a silver lining

LPG cylinder price hike: The rates charged for subsidised cooking gas (LPG) were increased by Rs 2.94 per cylinder on Wednesday, fuel retailer Indian Oil Corporation (IOCL) said in a statement. The subsidised LPG cylinder in Delhi for domestic customers would be available at Rs 505.34 in November 2018, against Rs 502.40 in October 2018 in Delhi. This hike in gas cylinder price is due to GST on the change in base price. Indian Oil Corp (IOC) is the country's biggest fuel retailer.

Also, the price of Non-Subsidised LPG cylinder will be increased by Rs 60 per cylinder in November 2018 due to change in international price and foreign exchange fluctuations. 
While the amount of hike is not big, it should be remembered that this is the sixth straight monthly increase in rates since June. Notably, prices have jumped by Rs 14.13 per cylinder from then. However, the subsidy transfer in customers’ bank account has been increased to Rs.433.66 per cylinder in November 2018 as against Rs. 376.60 per cylinder in October 2018. Thus the domestic subsidised LPG customer is protected against the increase in prices of LPG. 

IOC statement said, "While the price of non-subsidised LPG at Delhi will increase by Rs 60 per cylinder in November 2018, mainly due to change in international price and foreign exchange fluctuations, the actual impact on subsidised domestic LPG customers is only Rs 2.94 per cylinder, which is mainly due to GST."

On hike in subsidy to offset the increase in rates, IOC said, "Thus the domestic subsidised LPG customer is protected against the increase in prices of LPG."

Subsidy amounts change from month to month in accordance with average global benchmark LPG rate and foreign exchange rate. When the rates go up, the government has to fork out more. However,  tax is calculated on subsidised cylinder at market rates. With the increase in fuel prices in the international market, gas, petrol and diesel bills of the government have gone up substantially.