The past few months saw a sharp rise in LPG prices, as the international crude oil prices did not come down during this period. On 5 July, state-owned retailers sold 14.2 kg . increased the price of domestic lpg cylinder In Delhi, it has been increased by Rs 50 to Rs 1,053 with immediate effect. Meanwhile, recently domestic LPG price hikeThe price of cylinder in Mumbai is now Rs 1,052.50 and in Kolkata Rs 1,079. At the same time, Chennai residents will have to pay Rs 1,068.50 for a cylinder.
Domestic LPG price increased by Rs 219 in last one year
A year ago in July 2021, the price of domestic LPG in Delhi was Rs 834.50. Thereafter, the prices went up to Rs 859.50 in August that year and then to Rs 884.50 in September 2021. On October 6 last year, LPG prices in Delhi were hiked by Rs 15 to Rs 899.50, and remained constant till March 2022. When the international crude oil prices went above $100 a barrel, there was an increase of Rs.50. After that, in May, the price of domestic LPG was hiked twice and touched Rs 1,003 in the national capital amid rising crude oil prices. Thus from July 2021 to July 2022, the increase in the price of LPG was increased by Rs 218.50 crude oil prices among other factors.
How is the LPG price calculated?
LPG prices are calculated on the basis of a formula called Import Parity Price (IPP). India IPP uses the formula as it imports most of its crude oil, while IPP Saudi Aramco’s LPG price. Hence the price of crude oil is an important factor in the determination of LPG prices.
Several factors have been considered in the IPP including FOB (Free On Board) price, ocean freight, insurance, custom duty, port payable. India converts this price from dollar to rupee, which is why the value of rupee against USD becomes an important factor while calculating the price of LPG. Apart from this, other domestic factors including freight cost, oil company margin, bottling cost, marketing expenses, dealer commission and GST also determine the price of LPG cylinder – both commercial and domestic.
Crude oil price below $100 per barrel, will LPG prices come down?
International crude oil prices fell nearly 2 per cent to a 12-week low in volatile trade on Wednesday as investors worried more worried energy demand could hit a potential global recession, Reuters reported.
Brent crude futures slipped below $100 a barrel for the third session in decline on Thursday. Brent crude futures fell 94 cents, or 0.9 per cent, to $99.75 a barrel, having hit a session low of $98.50 earlier. WTI crude futures were down 79 cents, or 0.8 per cent, at $97.74 a barrel.
With the fall in crude oil prices in the last two days, there is a high possibility that the oil marketing companies will consider reducing the price of LPG.
What analysts say about the impact
Speaking on the impact of crude oil on LPG prices, Swarnendu Bhushan, Senior Group VP, Oil and Gas Analyst, Motilal Oswal Financial Services said, “The current Russia-Ukraine geopolitical crisis has pushed up oil prices. As a result, LPG prices in India have also increased. The devaluation of the rupee has added to this. We import 60 per cent of our LPG consumption. As oil prices come down, we would expect LPG prices to calm down as well.
“The uptrend in LPG prices is directly linked to a few key factors. Suvigya Awasthi, Associate Partner, PSL Advocates & Solicitors, said, “International petroleum gas prices and the Indian currency are weakening against the US Dollar, which has seen record losses in the recent past.” “The prices of LPG components LPG, Butane and Propane have seen a sharp rise in the international market due to Russia-Ukraine conflict and supply constraints,” he said.
Anushka Arora, Principal and Founder, ABA Law Office, said that the recent hike in LPG prices can be attributed to various factors. “Several factors have given rise to this jump in LPG prices- it is not just one factor- we can attribute this exponential price rise to various factors such as rise in crude oil prices, rising inflation and Russia-Ukraine war. can.” Told.
read all breaking news, today’s fresh newswatch top videos And live TV Here.