 "Non-subsidised LPG price cut by Rs 43.5 a cylinder")
In line with declining global crude oil prices, oil marketing companies (OMCs) on Thursday cut prices of non-subsidised cooking gas, or liquefied petroleum gas (LPG), by Rs 43.50 a 14.2-kg cylinder and jet fuel by 12.5 per cent.
The oil companies have, however, not cut prices of diesel and petrol as expected on Wednesday. The companies plan to use the benefit accruing from the dip in crude prices to offset inventory losses of over Rs 14,000 crore.
A non-subsidised LPG cylinder will now cost Rs 708.50 in Delhi, the fifth straight reduction in rates of market-priced LPG since August this year. Consumers use non-subsidised LPG after exhausting their quota of 12 subsidised cylinders in a year.
The oil companies have, however, not cut prices of diesel and petrol as expected on Wednesday. The companies plan to use the benefit accruing from the dip in crude prices to offset inventory losses of over Rs 14,000 crore.
A non-subsidised LPG cylinder will now cost Rs 708.50 in Delhi, the fifth straight reduction in rates of market-priced LPG since August this year. Consumers use non-subsidised LPG after exhausting their quota of 12 subsidised cylinders in a year.
The price of non-subsidised LPG was previously reduced on December 1 by Rs 113. Prices have been brought to a three-year low after the Thursday’s cut. The price of subsidised LPG has not been changed and each such LPG cylinder currently costs Rs 417 in Delhi.
Besides, aviation turbine fuel rates have been cut by 12.5 per cent. The fuel constitutes more than 40 per cent of airlines’ operating costs and the price cut will ease the financial burden of cash-strapped carriers.
The three fuel retailers —Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation Limited — revise jet fuel and non-subsidised LPG prices on the first of every month, based on the average international prices in the preceding month.
Global crude benchmark Brent has slipped 48 per cent since June on the back of a global decline in demand amid rising supplies, particularly shale oil supply, from the US. Brent has fallen to $57.33 a barrel, its lowest level since May 2009.
The government also announced OMCs under-recoveries on subsidised sales of LPG declined 16 per cent from Rs 279.9 a cylinder last month to Rs 235.9 currently. Losses on kerosene sales have also dropped 24 per cent to Rs 19.46 a litre since last month.
OMCs’ gross under-recoveries stood at Rs 1,39,000 crore in last financial year (2013-14) and Rs 51,000 crore in the first half of the current financial year. The losses are expected to shrink to less than Rs 75,000 crore in the full financial year.