Petroleum Ministry asks oil companies to rationalise prices of commercial LPG cylinders

New Delhi: The Petroleum Ministry has asked Oil companies to rationalise the price of commercial LPG cylinders. The ministry has asked the companies to bring uniform rates for all commercial cylinders by January 1, 2018.

The order aims to ensure that commercial cooking gas is not sold at a price lower than domestic non-subsidised cooking gas.

Commercial cylinders attract 18 percent tax while domestic ones attract 5 percent tax. However companies offer distributors of commercial cylinders deep discounts to compete in the market.

The Oil Ministry has asked distributors to bring the discount at Rs 3-4 per kilo.

Due to the discount offered on commercial cylinders, the rates between them and domestic cylinders were either at par or even less than the former.

Big hotels and restaurants, will now have to shell out more on commercial cylinders due to the reduction in discount.

Government yesterday withdrew its decision to raise LPG prices by Rs 4 per cylinder every month as the move was seen contrary to its Ujjwala scheme of providing free cooking gas connections to the poor.

The government had previously ordered public sector oil marketing companies to raise domestic cooking gas (LPG) prices by Rs 4 per cylinder every month beginning June 2016 with a view to eliminating subsidies.

Subsequently, Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) have not raised LPG prices from October.

Previously, the oil firms were authorised to increase price of subsidised domestic LPG cylinder by Rs 2 per 14.2-kg cylinder per month (excluding VAT) with effect from July 1, 2016. Oil companies had hiked LPG rates on 10 occasions since that go-ahead.

Every household is entitled to 12 cylinders of 14.2-kg each at subsidised rates in a year. Any requirement beyond that is to be purchased at market price.