LPG Cylinder Price Hike: Cost Increases by Rs 8.50 for Commercial Use from August 1
In another fresh development, oil companies announced another hike in the price of commercial LPG cylinders with effect from August 1. The quantum of rise was modest at ₹ 8.50 but definitely augments the added financial outlay incurred by business or commercial establishments using these cylinders. There has, however, been no change in domestic cylinder prices.
Price Revision Details
As is the practice, oil companies have revised the price of LPG at 6 am on the first of the month. This practice revision mirrors global oil price trends and the domestic demand-supply ratio, but today’s announcement is of relevance to commercial consumers.
New Rates of Commercial Cylinders
According to the website of Indian Oil Corporation Limited (IOCL), the new rates of LPG for commercial cylinders are:
In Delhi, the price has increased from Rs 1,646 to Rs 1,652.50.
In Kolkata, it increased from Rs 1,756 to Rs 1,764.50.
The price of a commercial cylinder in Mumbai has gone up from Rs 1,598 to Rs 1,605.
In Chennai, the commercial cylinder will now cost Rs 1,817, which was earlier at Rs 1,809.50.
These price increases have to ultimately affect restaurants, caterers, and other businesses relying on commercial LPG cylinders for cooking and heating.
Earlier Price Reductions
It may be recalled that last month, oil marketing companies had reduced prices of commercial LPG cylinders. Earlier in July, prices had been cut by Rs 30, thus giving companies some relief as costs ran higher than in the recent past. That the price rise in August would send the firms in a tailspin shows how uncertain fuel pricing is and how directly it begins to affect various sectors of the economy.
Domestic Cylinder Prices Remain Stable
While the price of commercial cylinders has gone up, that for domestic LPG cylinders has remained unchanged. The government had done the price cut on domestic cylinders last on International Women’s Day earlier this year. The price of a domestic LPG cylinders in Delhi is at present Rs 803. This is important for household budgets because of rising inflationary pressures across most items and services.
Significance of Domestic Cylinder Pricing
Government decision to keep the price of domestic cylinders may be considered significant as it facilitates the objective of not burdening households significantly in terms of money. Domestic LPG cylinders are a very useful product for cooking and home heating purposes. It is believed that any substantial price rise may easily stir public sentiment.
Additionally, the stability in prices of local cylinders can also be seen as a measure of the government’s effort to tame inflation and to save the middle-class family, which heavily relies on LPG for daily cooking purposes.
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Effects of Price Changes
On Business
The recent price hike of commercial LPG cylinders possibly reflects into further ramifications of operational costs for many businesses. Such an increased cost may need to be passed on to consumers in terms of higher prices for restaurants and catering services.
This increase in costs might drive the business community toward finding alternatives to save on costs in the face of rationalizing fuel consumption or seeking substitutes. In this situation, inflation is creating problems for many sectors.
For Consumers
The status quo in price for domestic cylinders is definitely a sigh of relief for consumers, compared to the rise in commercial cylinder prices and, in turn, prices of restaurants and food services. Now, what must be crossing the consumers’ minds is the possibility of an increase in their menu prices as well, as business players react to the situation.
Conclusion
Business in India faces another setback. Now, a Rs 8.5 per cylinder hike in commercial LPG cylinders prices, effective August 1, has been added to the list of economic challenges before companies. With international crude prices and product rates trending higher, this increase in commercial rates comes at a time when it has maintained a steady price line for domestic cylinders, obviously with a view to protecting the interests of households. The increase in these commercial rates is an open reminder of the dangerously volatile nature not just of energy prices, but also of their cascading impacts on the economy.
While businesses take a lead in adjusting their prices, consumers must keep themselves posted on how such price changes may affect everyday expenses. Therefore, with changes in the price of fuel happening at any time, businesses and consumers must be prepared to adapt and strategize accordingly.
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