New Delhi: Domestic cooking gas prices were increased by Rs 29 per cylinder on Saturday, marking the second hike in three months as state-owned fuel retailers continue to face pressure from elevated global energy prices.
With the revision, the price of a 14.2-kg LPG cylinder in Delhi has risen from Rs 913 to Rs 942, effective June 7, according to industry sources.
The latest increase follows a Rs 60 hike implemented on March 7 after tensions in West Asia disrupted energy markets and pushed up international fuel prices. Industry officials said the earlier revision had only partially compensated oil marketing companies for losses incurred on domestic LPG sales.
Before the latest hike, state-run fuel retailers were estimated to be losing around Rs 703 on every LPG cylinder sold, industry sources said.
The LPG price increase comes amid a broader rise in fuel costs. Since mid-May, petrol and diesel prices have been raised by a cumulative Rs 7.50 per litre, while compressed natural gas (CNG) prices have increased by nearly Rs 6 per kilogram.
Despite these revisions, oil marketing companies are reportedly continuing to sell petrol and diesel below cost, with estimated losses of about Rs 11 per litre on petrol and Rs 33.6 per litre on diesel.
The government has so far refrained from passing on the full impact of rising global energy prices to consumers, instead requiring state-owned retailers to absorb part of the burden as international crude oil and fuel markets remain volatile.
Meanwhile, rating agency Crisil has warned that rising fuel prices could add to inflationary pressures across the economy. In a report released earlier this week, the agency said higher petrol and diesel prices are likely to increase transportation and manufacturing costs, eventually pushing up consumer prices.
According to Crisil, petrol and diesel prices have risen by about Rs 7.5 per litre since May 15, and further increases may be required if global crude oil prices remain elevated.
The agency estimated that a Rs 7.5-per-litre increase in petrol and diesel prices could add around 36 basis points to Consumer Price Index (CPI) inflation. If cumulative hikes reach Rs 10 per litre, the impact on inflation could rise to nearly 48 basis points.
