After the latest hike, LPG is now costlier than electric cooking in Delhi

A 14.2-kg domestic LPG cylinder costs Rs 843.5 in the national Capital

Liquefied petroleum gas (LPG) has now become more expensive than cooking using electricity in Delhi. A 14.2-kg domestic LPG cylinder now costs Rs 843.5 in the national capital after the latest hike effective July 1.

According to calculations by Deepak Sriram Krishnan, associate director, Energy at World Resources Institute (WRI) India, electric cooking is cheaper than LPG cooking at present prices.

“It costs Rs 10.15 for heating 10 kg water from ambient temperature to boiling point in Delhi using a domestic LPG cylinder. Comparably, the cost through an electric stove will come up to Rs 9.46 and with an induction stove, it will be Rs 8.33 for heating the same quantity. This is assuming the cost of electricity at Rs 8 a unit, the highest slab,” Krishnan told Business Standard.

The exact number will vary across states because of differing LPG and electricity prices. In Delhi itself, due to the significant subsidy on domestic electricity connections, the cost should come down further.  

Piped natural gas (PNG) was already cheaper than LPG in India. Bhanu Patni, senior analyst at India Ratings and Research, said, “The hike in LPG prices has further increased the gap between the prices of LPG and PNG. On a kilo calorie comparison, PNG is now over 60 per cent cheaper than LPG, something that should speed up adoption of PNG by households.”

Between January 1 and July 1, the price of domestic LPG cylinders has gone up by Rs 140 to Rs 834. This is the highest price at which a “subsidised” domestic cylinder is being sold in the city following the gradual lowering of government support since the elimination of LPG subsidy in May 2020. There is negligible subsidy being borne by the Centre at present prices.

“The allocation of domestic natural gas, currently priced at $1.79 per million British thermal units (mBtu), has led to the lower price of PNG. However, even if the prices were to increase, competitiveness is expected to remain for PNG over LPG,” Patni added.

Domestic natural gas prices are expected to be hiked by 60 per cent from October 2021. After the rise, it will be priced around $2.86 per mBtu. This will result in more expensive PNG, but it will remain considerably cheaper than LPG in the absence of subsidy support. “The subsidy on LPG has also been almost done away with — a positive move for oil marketing companies, which reported nil subsidy receivables in March 2021,” Patni added.

This can be an incentive for a faster transition towards PNG. However, this is mired by infrastructure constraints. According to a top oil ministry official, only 1.5 million of Delhi’s 4 million households are eligible to get PNG connections. This is despite Delhi being one of the first cities to get PNG connectivity.

Even in other cities where city gas distribution projects have recently been awarded, work has been slow. “Getting clearances from state, district, and local authorities take a very long time. The Covid-19 pandemic has also slowed down project implementation, which requires digging up existing roads and laying pipelines,” an official said.