The oil marketing companies have announced a fresh hike in the price of 19 kg commercial LPG gas cylinders, effective from October 1. This latest adjustment has increased the price by Rs 50, raising the retail cost to Rs 1,741.50 per cylinder in Delhi. The increase follows a Rs 39 hike implemented on September 1.

The price of a 19 kg commercial LPG cylinder was reduced by Rs 30 in July. A significant reduction of Rs 69.50 was implemented, bringing the price to Rs 1,676 in Delhi as of June 1. A smaller reduction of Rs 19 was also introduced in May.

While the specific factors behind the latest increase have not been publicly disclosed, a combination of global and domestic influences is likely at play. Fluctuations in global crude oil prices directly impact LPG rates. Recent geopolitical tensions in the Middle East, especially Israel’s targeted raids in Lebanon, have contributed to price instability. Additionally, the potential return of Libyan oil supply has introduced further uncertainty in the market.

The latest increase in commercial LPG prices is expected to have a ripple effect across industries that rely heavily on this fuel for their operations. Restaurants, hotels, and catering businesses, which depend on LPG for cooking, will face higher operational costs. This could be a significant blow to the hospitality sector, which is still recovering from the pandemic’s economic impacts.

Industries that rely on LPG as a primary energy source, such as small-scale manufacturing units, will also feel the pinch. The price hike could lead to increased production costs, potentially impacting profit margins and forcing manufacturers to consider raising product prices. With businesses facing increased costs, consumers may eventually bear the brunt of this hike. Retail prices for goods and services that depend on LPG could rise.

The timing of this price hike is particularly challenging, as it coincides with the festive season of Dussehra and Diwali when demand for products and services typically surges. The increase may dampen consumer spending, as businesses might pass on the added costs to end customers.

While the immediate impact of the LPG price hike will be felt by commercial users, consumers are not entirely insulated from the effects. As businesses grapple with rising operational costs, these increases may be transferred to consumers through higher prices for goods and services. This situation could contribute to inflation, affecting household budgets and potentially reducing purchasing power.

While commercial LPG prices are on the rise, the Indian government continues to encourage the use of LPG for household cooking. Through initiatives like the Pradhan Mantri Ujjwala Yojana, the government aims to make cleaner cooking fuels accessible to low-income families by providing subsidies on domestic LPG cylinders. This program plays a crucial role in reducing the dependence on traditional, polluting cooking methods, such as firewood and kerosene, and promotes the adoption of safer, more efficient alternatives.

Story first published: Tuesday, October 1, 2024, 7:35 [IST]