Explained | Why LPG prices are rising

Adding to the woes of consumers, the price of liquefied petroleum gas (LPG) for domestic consumption has increased by 41 per cent or Rs 237.5 per cylinder in the last ten months.

Cooking gas prices in Delhi zoomed from Rs 581.5 a cylinder in May 2020 to Rs 819 as of March 1, 2021. In 2021 alone, prices were hiked by Rs 125 per cylinder with three consecutive hikes in February, going against the conventional practice of having only one hike in a month.

India has a total of around 28.8 crore LPG consumers, of which 13.5 crore are served by Indian Oil Corporation, 7.4 crore by Bharat Petroleum Corporation and 7.9 crore by Hindustan Petroleum Corporation. There has been a 95 per cent increase in India’s LPG consumption from 14.8 crore in 2014-15. The country’s LPG penetration is almost 99 per cent now, mainly owing to the Pradhan Mantri Ujjwala Yojana (PMUY).

It is this spike in the number of users that makes the rise in prices a cause for concern as more than 8 crore people below the poverty line are consumers under the Ujjwala scheme. Moreover, the government did away with the direct benefit transfer on LPG (DBTL) subsidy from May 2020.

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