All you wanted to know about LPG pricing formula

Last week, the Centre raised the price of non-subsidised LPG (liquefied petroleum gas) for the fifth month in a row. The 14.2 kg non-subsidised LPG cylinder now costs ₹714 in Delhi, up ₹140 since August 2019. The LPG pricing formula could see the popular cooking fuel’s price head higher, if the recent flare-up in US-Iran tensions takes a turn for the worse.

What is it?

LPG pricing in India is done on the basis of a formula — import parity price (IPP). The IPP is determined based on LPG prices in the international market, assuming that the fuel is imported into the country.

The IPP, based on Saudi Aramco’s LPG price, includes the FOB (free on board) price, ocean freight, insurance, custom duties, port dues, etc. Read More

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