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Monday, September 26, 2022
HomeIndiaLPG CNG Prices: Changes in LPG-CNG prices from September 1; How is the...

LPG CNG Prices: Changes in LPG-CNG prices from September 1; How is the price determined?

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New Delhi: At the beginning of every month, fuel companies announce new prices of products. Companies sometimes raise prices and sometimes lower them. On one date in the month of August, oil marketing companies had reduced the price of a commercial LPG cylinder (19 kg) by Rs 36. This did not directly benefit domestic LPG consumers. Currently, domestic LPG cylinder price in Delhi is Rs 1,053.

New Delhi: At the beginning of every month, fuel companies announce new prices of products. Companies sometimes raise prices and sometimes lower them. On one date in the month of August, oil marketing companies had reduced the price of a commercial LPG cylinder (19 kg) by Rs 36. This did not directly benefit domestic LPG consumers. Currently, domestic LPG cylinder price in Delhi is Rs 1,053.

Meanwhile, the cylinder price was the same in Delhi in July. The price of LPG depends on many other factors including the price of crude oil. Same is the case with CNG. Due to the huge increase in CNG, the budget of motorists has completely collapsed. The prices went up so much that the taxi services had to increase their minimum fares and it also burdened the common man’s pocket. CNG price in Delhi is currently Rs 75.61 (IGL), Rs 80 (MGL) and Rs 83.9 (Adani Gas) per kg.

Will the price go up in September

LPG and CNG prices depend on many factors. One of the biggest factors is the price of crude oil. The price of Brent crude has increased somewhat and currently it has reached 99.80 dollars per barrel. However, it is still around $100. Therefore, there is no possibility of reducing the price from the oil marketing companies at present. There has been no major change in domestic LPG prices since last 2 months. So it may increase a little. Talking about CNG, companies have continuously hiked its prices over the past few months. There is less possibility of either decrease or increase in this now. CNG rates are likely to remain at the same level.

How is the price determined

The Import Parity Value formula is used to determine the price of LPG. These include crude oil price, ocean freight, insurance, customs duty, port charges, dollar to rupee exchange, freight, oil company margin, bottling cost, marketing cost, dealer commission and GST. Almost the same factors also affect CNG prices. The key difference is that CNG is not made from crude oil but from natural gas. Hence natural gas is affecting CNG rates. India imports more than half of its natural gas.

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