The price of subsidised cooking gas was today hiked by Rs 2.94 per cylinder due to tax impact on the change in base price.
Starting on Nov. 1, the standard 14.2 kilogram subsidised LPG cylinder will set you back by Rs 505.34, Indian Oil Corporation, the nation’s biggest fuel retailer, said in a statement. This is the sixth straight monthly increase in rates since June from when prices have increased by Rs 14.13 per cylinder.
All liquefied petroleum gas consumers have to buy the fuel at market price. The government, however, subsidises 12 cylinders of 14.2-kg each per households in a year by providing the subsidy amount directly in bank accounts of users.
This subsidy amount varies every month depending on the changes in the average international benchmark LPG rate and foreign exchange rate.
When international rates move up, the government provides a higher subsidy. But as per tax rules, the Goods and Services tax on LPG has to be calculated at the market rate of the fuel. The government may choose to subsidise a part of the price but tax will have to be paid at market rates. This has led to an increase in price.
The non-subsidised or market price LPG rates have gone up by Rs 60 per cylinder to Rs 880. The subsidy transfer in customers’ bank account has been increased to Rs 433.66 per cylinder in November as against Rs 376.60 per cylinder in October. “Thus the domestic subsidised LPG customer is protected against the increase in prices of LPG,” it said.