A good nine hours after public sector oil marketing companies had announced a Rs 26.5 per cylinder hike in non-subsidised domestic LPG prices, the Government asked them to put the hike on hold.

Thus, till further announcement, the price will remain at the October level of Rs 895.50 (Delhi) for every 14.2 kg non-subsidised domestic LPG cylinder. However, no formal communication was sent to the OMCs on the decision.

There are indications that the Himachal Pradesh elections, due on November 4, was the reason for the Government developing cold feet.

“This Government decision has created more confusion among all the stakeholders, who are still trying to come to terms with the decision on capping the number of subsidised LPG cylinders available for each household in a year,” a senior oil company official said.

Industry observers say that the Government should not, for one moment, think that the consumer doesn’t realise that this is just a political move.

In September, the Government had restricted the supply of subsidised domestic LPG cylinders to six a year per household. While capping the number of subsidised cylinders, the Government had allowed the OMCs to charge market rate for non-subsidised LPG cylinders and also notify the rates on a monthly basis.

Since then, a miniscule number of consumers – whose annual consumption is higher than the six-cylinder limit – have purchased their seventh cylinder at market price.

The demand for non-subsidised domestic LPG cylinders was seen in the last week of October from those consumers who had exhausted their quota of three subsidised cylinders for this fiscal from September 15.

The price of subsidised domestic LPG cylinders remains unchanged at Rs 399 per cylinder (Delhi).

Also, speculations are rife that the Government will also increase the cap limit of subsidised domestic LPG cylinders from six to maybe nine a year.

richa.mishra@thehindu.co.in

(This article was published on November 2, 2012)
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