India reduces commercial LPG prices

Indian state-run oil marketing companies (OMCs) have reduced commercial LPG cylinder prices on 1 April, while leaving domestic LPG prices unchanged.

The cut in commercial cylinder prices comes after three consecutive months of higher prices since the start of this year. The OMCs reduced commercial LPG cylinder prices by 76-92 rupees (92¢-$1.12). A 19kg commercial LPG cylinder will now cost Rs2,028 in Delhi, Rs1,980 in Mumbai, Rs2,132 in Kolkata and Rs2,192.50 in Chennai.

A 14.2kg LPG cylinder will continue to cost Rs1,103 in Delhi, Rs1,102.50 in Mumbai, Rs1,129 in Kolkata and Rs1,118.50 in Chennai, according to state-controlled refiner IOC.

Domestic LPG is used for cooking applications in residential buildings, while commercial LPG cylinders are mostly used in canteens, offices, colleges, schools, hospitals, restaurants and hotels.

The decline in prices has come as state-controlled Saudi Aramco reduced its March propane CP to $720/t and butane CP to $740/t, rendering the propane-butane CP spread at -$20/t.

India's LPG prices typically move in line with Aramco's CPs, which are used as a benchmark for LPG trades to Asia-Pacific.

It remains to be seen if the government will cut prices later in May as Saudi Aramco has cut its April propane CP to $555/t, and butane CP at $545/t, rendering the propane-butane CP spread at $10/t.

LPG usage is likely to find support from the government's decision to extend a Rs200 subsidy for every 14.2kg LPG cylinder under the government's Pradhan Mantri Ujjwala Yojana (PMUY) scheme for a year, starting from April.

By Rituparna Ghosh