Last month, the government had decided to restrict supply of subsidised domestic LPG cylinders to six per households in a year. Any requirement over and above this will have to be bought at market rate, which is almost double the subsidised price of Rs 399 for a 14.2-kg cylinder in Delhi.
"The retail selling price of the 14.2-kg non-subsidised domestic LPG cylinder at Delhi has been increased by Rs 127 per cylinder with effect from Oct 1," Indian Oil Corp, the nation's largest fuel retailer, said.
IOC Director (Marketing) M Nene said any decrease in the price of LPG in the international market would similarly be passed on to consumers by way of reduction in the prices of non-subsidised LPG cylinders.
"There will, however, be no restrictions on the number of non-subsidised cylinders over and above the six capped subsidised cylinders," IOC said.
While subsidised cylinders will continue to be available at Rs 399 per cylinder (in Delhi), the market rate of non-subsidised LPG cylinders will be notified on a monthly basis by fuel retailers. The government has granted exemption from customs and excise duty on non-subsidised LPG cylinders only for domestic consumption to reduce the price burden on the common man, Nene said.
The price of commercial 14.2-kg LPG cylinder in Delhi will be Rs 1,062 while that of a 19-kg bottle would be Rs 1,536.5. As per the new scheme, oil firms will from now would declare the monthly prices of non-subsidised 14.2-kg domestic LPG cylinders for supplies to households as per landed cost on import parity basis, which inter-alia is based on the average FOB value, premium/discounts prevailing in the international market, besides USD-rupee exchange rate during the previous month.
"With this, the price of the non-subsidised domestic LPG cylinder will move up and down every month based on the price of LPG in the international market, which in turn is also determined by global demand-supply situations," IOC said.
At present, 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, Nene added.