Housewives can expect tough times ahead maintaining household budgets as all indicators suggest that prices of non-subsidized domestic cooking gas cylinders are expected to go up till March, 2013, much before they exhaust their quota of another three subsidized cooking gas cylinders.
This is because the price of domestic liquefied petroleum gas (LPG or cooking gas) has been linked to international gas prices which typically shoots up during the winter months in the West on the back of higher demand for the product for heating purposes. Indian oil marketing firms increased non-subsidized cooking gas prices by 17% to Rs 883 per cylinder on Monday and have decided to revise the retail selling price of the 14.2-Kg non-subsidized domestic LPG cylinder every month based upon the international LPG prices and accordingly pass it on to the Indian consumers.
"Any decrease in the price of LPG in the international market would similarly be passed on to the consumers by way of reduction in the domestic prices of non-subsidized LPG cylinders supplied to households during the monthly review," said Indian Oil, marketing director M Nene. He also said that currently, the international LPG market is tight on the supply side owing to increased global demand since LPG is also used in several markets as a winter heating fuel. However, when supplies improve and prices fall, the benefit would be passed on to the consumers, he said.
Going forward the consumers will have to pay more than double the subsidised cooking gas prices as the government has restricted the supply of subsidized domestic LPG cylinders at 6 cylinders per anum from September 14. For the rest of the fiscal they can get only three more subsidized cylinders at around Rs 400. The oil firms will from now declare the monthly prices of non-subsidized LPG cylinders for supplies to households as per landed cost on import parity basis, which will be based on the average FOB value, premium or discounts prevailing in the international market, besides the rupee-dollar exchange rates during the previous month.
This is because the price of domestic liquefied petroleum gas (LPG or cooking gas) has been linked to international gas prices which typically shoots up during the winter months in the West on the back of higher demand for the product for heating purposes. Indian oil marketing firms increased non-subsidized cooking gas prices by 17% to Rs 883 per cylinder on Monday and have decided to revise the retail selling price of the 14.2-Kg non-subsidized domestic LPG cylinder every month based upon the international LPG prices and accordingly pass it on to the Indian consumers.
"Any decrease in the price of LPG in the international market would similarly be passed on to the consumers by way of reduction in the domestic prices of non-subsidized LPG cylinders supplied to households during the monthly review," said Indian Oil, marketing director M Nene. He also said that currently, the international LPG market is tight on the supply side owing to increased global demand since LPG is also used in several markets as a winter heating fuel. However, when supplies improve and prices fall, the benefit would be passed on to the consumers, he said.
Going forward the consumers will have to pay more than double the subsidised cooking gas prices as the government has restricted the supply of subsidized domestic LPG cylinders at 6 cylinders per anum from September 14. For the rest of the fiscal they can get only three more subsidized cylinders at around Rs 400. The oil firms will from now declare the monthly prices of non-subsidized LPG cylinders for supplies to households as per landed cost on import parity basis, which will be based on the average FOB value, premium or discounts prevailing in the international market, besides the rupee-dollar exchange rates during the previous month.
Source:-The Economic Times
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