India has increased prices of commercial LPG cylinders for the first time in three months effective Oct. 1, in line with higher regional prices, oil ministry officials said this week, while raising the subsidy on LPG cooking fuel cylinders for around 97 million low-income families.
The price of a commercial LPG cylinder has been raised by Rupees 209 ($2.5) for a 19-kg cylinder.
The price increase came after two successive reductions in August and September.
In New Delhi, the new price is Rupees 1731.5 ($20.8) for a 19 kg cylinder, up 13.7% from the previous month.
The price of a domestic LPG cylinder of 14.2 kg was unchanged at Rupees 903 ($10.8).
Analysts said the rise in LPG price for commercial use has been consistent with the recent increases in Saudi Aramco Contract Prices, the benchmark for LPG price.
Higher Saudi CPs
Saudi Aramco set the October propane contract price at $600/mt, up $50/mt from the September term CP, and the October butane CP at $615/mt, up $55/mt on the month, making it the third straight monthly increase after the drop in July CPs.
Platts-assessed FOB Middle East propane averaged $593.93/mt in September, up from $555.39/mt in August, while FOB Middle East butane averaged $601.83/mt over September, up from $557.43/mt In August, S&P Global Commodity Insights data showed.
On Aug. 29, India cut the prices of domestic LPG cylinders to Rupees 903 for 14.2 kg, down 18% from the previous rate, in an attempt to tame high inflation in Asia’s third- largest economy.
India meets 55% of its LPG demand of 28.5 million mt/year via imports.
On Oct. 4, India raised the subsidy on LPG cylinders for cooking to Rupees 300 ($3.6) per cylinder, up by 50% from Rupees 200.
The higher subsidy for low-income families comes against the backdrop of high inflation and ahead of the national polls in 2024.
The government has also withdrawn a new 15% duty on private-sector importers bringing propane and butane into the country effective Sept. 1, following rising Saudi CPs and amid unhappiness in the non-government sector over the adverse impact of the additional import levy. Analysts said the decision to exempt these imports from the Agriculture Infrastructure and Development cess would help cut the burden on importers and ensure its cost implications were not passed on to consumers.
#theshippingtribune #latestnews #shippingnews #dailynews