New Delhi, June 7 (IANS) Petroleum Ministry on Sunday said the Indian household continues to buy cooking gas much cheaper than the household in any neighbouring country, and far below the price paid in advanced economies such as the United States, Australia and Canada.

A beneficiary of the Pradhan Mantri Ujjwala Yojana (PMUY) pays an effective Rs 642 for a 14.2 kg cylinder, and the general consumer in Delhi Rs 942, against a cost to supply that has now risen to over Rs 1,600, the ministry said in a statement.

The government continues to modulate the effective price to the consumer for domestic LPG.

Any household can buy as many cylinders as it needs at Rs 942. A PMUY beneficiary will additionally receive the direct benefit transfer of Rs 300 a cylinder on the first four refills each year — broadly the average annual consumption of a typical Ujjwala household, about four refills a year — and so pays an effective Rs 642 on those refills.

“This support is unchanged. Even a non-PMUY household would pay about Rs 700 below the market-linked cost of the cylinder. Retail prices differ marginally across locations on account of distribution costs,” said the ministry.

The commercial cylinder used by hotels and businesses is revised automatically every month, because its price is a direct pass-through of the international benchmark. The domestic cooking cylinder is not.

India used to import 60 per cent of its LPG requirements, and the landed cost of that import tracks the Saudi Contract Price (CP) that Saudi Aramco sets at the start of each month. This is an external price over which the Indian consumer has no control.

Expressed as the 50:50 propane-butane blend used for India’s LPG, the Saudi CP for LPG stood at about $543 a tonne in February, before the disruption.

Following the closure of the Strait of Hormuz in late February, the April contract price — the first set after the disruption tightened Mideast Gulf exports — rose to $775 a tonne, with propane at $750 and butane at $800, and has since edged up further to $790 a tonne in June.

The blended LPG benchmark has thus risen by about 46 per cent since the pre-crisis February level. The cost of the imported molecule rose with it, said the ministry.

—IANS

na/