Moily rules out any hike in LPG prices

The author has posted comments on this article Jaideep Shenoy, TNN | Dec 8, 2013, 01.33PM IST

MANGALORE: There is good news for consumers of LPG cylinders. The much-touted hike in price of cooking gas, that was expected to rise by about Rs 15 per cylinder after assembly elections, has been spiked. It was reported that the oil ministry had agreed to review delivery charges that were fixed a decade ago, resulting in this hike. Asserting that price of LPG cylinder will not rise was M Veerappa Moily, minister for petroleum and natural gas.

According to media reports quoting officials, the ministry had also agreed to give oil firms should be given the freedom to revise transportation charges every quarter because their delivery costs increase with monthly hike in diesel rates. A senior government official on condition of anonymity had said, "An in-principle decision has been taken. We are now examining whether the proposal would require an approval of CCPA."

The ministry does not require CCPA's approval in the normal course, but even a marginal hike in cooking gas price has political implications in the election year, executives in state oil firms maintained. The industry was expecting a formal order announcing new delivery charges only after mid-December when assembly elections in the five states end. Moily told reporters here that there will be no hike in LPG prices now that the assembly elections have ended.

Officials had maintained that the new charges would raise cooking gas rates by maximum Rs 15 per cylinder where cylinders are delivered beyond 110 kilometers with the impact felt most by consumers in hilly areas. Government determines cost of transporting LPG cylinder from bottling plants to distributors, which is inbuilt in consumer price. In April 2002, government had approved three slabs of distance based delivery charges of Rs 10, Rs 12 and Rs 14.