Commercial cylinder, auto LPG prices increased

State-owned oil marketing companies — IOC, BPCL and HPCL — on Sunday, increased the commercial LPG (liquefied petroleum gas) price by over Rs.220 a 19-kg cylinder. The have hiked the price of the eco-friendly Auto LPG, too, by nearly Rs.7 a litre. The new price, in Chennai, is Rs.54.07 a litre. Unlike the 14.2-kg domestic cylinders, commercial cylinders are not subsidised and their price is linked to the international LPG prices. This month's revision has widened the gap in the cost of the two products and increased the possibility of diversion. While a domestic cylinder costs Rs.404, a 19-kg cylinder is priced almost five times as much. While restaurants and hotels in the organised sector would either partly absorb or pass the entire additional expenditure to customers, commercial LPG users in the unorganised sector such as roadside eateries and tea stalls could now switch to diverted domestic cylinders, thus increasing the subsidy burden of the oil companies. “Curtailing diversion [of 14.2-kg refills] becomes a Herculean task,” an Indane distributor said, adding it would be challenging to restrain the delivery boys and even some customers from diverting. In September last year, 19-kg cylinder was priced, in Chennai, at Rs.1,349 each. The cost rose, over the months, and touched Rs.1568.50 in February and Rs.1,690.50 in March. On Sunday, it was hiked to Rs.1,913. Though commercial cylinders are available in various capacities — 5, 33 and 47.5 kgs – the 19 kg bottle is most popular. The prices of all the cylinders have increased. In Chennai, a 5-kg cylinder, which is also used by households and those coming on short-stay to the city, now costs Rs.524 as against Rs.465. Keywords: commercial LPG price, Auto LPG