India raises LPG prices for fourth time in last month

Indian state-controlled refiners have increased prices of non-subsidised LPG, a cooking fuel, for a fourth time in less than a month by 3pc, a move that has angered both opposition parties and people in the country.

The price of a 14.2kg LPG cylinder is now 819 rupees ($11.10) in Delhi, up from Rs794 on 25 February, Rs769 on 15 February and Rs719 on 4 February, according to a LPG dealer of state-controlled refiner Bharat Petroleum (BPCL). LPG prices are typically adjusted on the first of every month but lately the government has been making ad-hoc increases, and there were three increases last month. Rates have been increased by Rs225 since December. Price were at Rs594 in November. Delhi has stopped publishing both subsidised and unsubsidised LPG prices to avoid unwanted attention.

Prices of transport fuels are also at a record high, with the government charging over 60pc in tax on gasoline and diesel. The latest LPG price hike will further reduce the refill rate of households accessing bottles under the PMUY subsidy scheme and prompt a shift back to firewood for cooking. The government gave nil subsidy last September and is only giving around Rs28 as subsidy for a 14.2kg bottle, compared with more than Rs200 in early 2019.

Prime minister Narendra Modi's government has been facing criticism from consumers and opposition parties over fuel price hikes during the Covid-19 pandemic. Opposition leader Rahul Gandhi accused the government of "looting from the public", especially after the Covid-19 pandemic erased jobs and livelihoods by a record number in India.

Rates of LPG and transport fuels may have to be left untouched from April as key state polls loom in West Bengal, Assam, Kerala, Puducherry and Tamil Nadu. The Modi government has in the past left fuel rates untouched in the run-up to some key state polls.

India's budget cut the combined subsidy on LPG and kerosine to Rs130bn for the 2021-22 fiscal year ending 31 March, from a budgeted Rs409bn in 2020-21. Nearly all the subsidies are directed to LPG.

By S Dinakar