Gas retailers are already charging higher prices for Liquefied Petroleum Gas (LPG) after the government announced an Rs. 4.89 per kilogram increase in the rate list on Tuesday.
Following yesterday’s update, the official price of LPG for May is now Rs. 233.89 per kg. The increase comes as demand for the fuel soars in places that rely on piped gas, owing to acute commodities shortages and delayed shipments.
According to the OGRA statement, the LPG price for an 11.8 kg residential cylinder has risen to Rs. 2,759.89 for May 2023, up from Rs. 2,702.2 in April, bringing household cylinder prices up by Rs. 57.70 in only one month. Meanwhile, the price of a commercial cylinder (45.4kg) will rise dramatically, reaching Rs. 10,618.606 in May 2023, up from Rs. 10,397 in April 2023.
LPG (propane 40%, butane 60%) producer price is Rs. 158,541.88 per ton. This price included an excise duty of Rs. 85 per ton but did not include the Rs. 4,669 per ton petroleum levy.
It is expected to hike the cylinder price to Rs. 1,925.89 while raising the producer price to Rs. 163,210.88 per ton. The producer price of LPG would rise by about Rs. 29,377.96 per ton, or Rs. 346.66 for each 11.8 kg cylinder, due to an 18% general sales tax on fuel.
The marketing/distribution/transportation margin is Rs. 35,000 per ton (Rs. 17,000 per ton marketing margin, Rs. 10,000 per ton distribution margin, and Rs. 8,000 per ton transportation margin), or Rs. 413 per cylinder.
It is worth noting that the country is taxed twice on fuel, as they must pay 18 percent GST for each cylinder on top of a marketing/distribution margin of Rs. 35,000 per ton.
Consumers who currently face high pricing for essential needs will have to strain their budgets even further as energy prices rise. In the short term, gas and petrol prices have more room to grow, putting pressure on people’s wallets that have become increasingly thin due to high fuel prices.
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