India’s three government-run oil marketing companies (OMCs)—Indian Oil Corp. Ltd (IOCL), Bharat Petroleum Corp. Ltd (BPCL), and Hindustan Petroleum Corp. Ltd (HPCL)— on Sunday reduced the prices of non-subsidized domestic cooking gas across the country.
The price cut on Wednesday, for the four metropolitan cities, ranged from ₹53 to ₹56.5 for a 14.2 kg non-subsidized liquefied petroleum gas(LPG) cylinder and comes in the backdrop of global energy prices on a downward spiral in the backdrop of coronavirus outbreak.
According to information available on Indian Oil Corporation’s website, an LPG cylinder was available for ₹805.50 in Delhi. In Kolkata, LPG cylinder prices were priced at ₹839.50, in Mumbai at ₹776.50 and in Chennai at ₹826.
Analysts are expecting a perfect storm in the energy markets that will help major consumers such as India manage inflationary and fiscal pressures.
The Sunday LPG price cut follows the substantial increase in LPG prices last month. Fuel retailers revise prices of LPG cylinders on the first day of every month, but the price is primarily dependent on the international benchmark rate of LPG and the exchange rate of US dollar and rupee.
The outbreak of coronavirus in China has forced energy firms there to suspend delivery contracts and reduce output. This has impacted both global oil prices and shipping rates, with the Paris-based International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (Opec) cutting global oil demand growth outlook. Trade tensions and a slowing global economy also have an overhang on energy markets.
“For now, what we know for sure is that the month of February will record the worst oil demand contraction since the Great Recession.