LPG Cylinder, In a notable price hike, oil marketing companies have increased the cost of commercial LPG gas cylinders by ₹48.50, effective from October 1st. This marks a significant increase for businesses and establishments that rely heavily on these cylinders for daily operations. As a result, the price of a 19 kg commercial LPG cylinder in Delhi now stands at ₹1,740, up from the previous price of ₹1,691.50.
Impact on the Business Sector
This price hike is expected to have a direct impact on commercial establishments such as restaurants, hotels, and other businesses that utilize LPG cylinders as part of their operations. These industries are particularly reliant on LPG for cooking and heating purposes, making the increased cost a major concern for their operational budgets. For smaller businesses, especially those in the food industry, this price rise could lead to an increase in operational costs, potentially pushing them to adjust pricing for end consumers.
In addition to the 19 kg cylinder, the price of the 5 kg Free Trade LPG cylinder has also seen an increase of ₹12. This smaller variant is commonly used by smaller establishments and individual consumers, meaning a wider impact across different levels of the economy.
Recurring Price Hikes
This is not the first time oil marketing companies have increased the price of commercial LPG cylinders this year. Last month, on September 1st, the price of a 19 kg commercial LPG cylinder was raised by ₹39, bringing the retail price in Delhi to ₹1,691.50 at the time. The consistent increase in prices is becoming a burden for businesses that are still recovering from the economic setbacks caused by the pandemic.
Reasons for the Hike
The price hike comes amid rising global fuel costs, which have been a major factor in driving up the prices of various energy resources, including LPG. Global fluctuations in crude oil prices, combined with supply chain challenges, have contributed to the increased costs for oil marketing companies, which are now passing these additional costs on to consumers.
While businesses bear the brunt of these increased costs, the government has not implemented any changes in the price of domestic LPG cylinders, providing some relief to households. For now, domestic consumers using LPG for cooking in their homes will not experience an immediate impact from the rising costs in the commercial sector.
Influence on Consumer Prices
The rise in commercial LPG cylinder prices is expected to lead to higher costs for end consumers, especially in industries that rely on LPG for cooking and other essential processes. Restaurants and hotels, for example, may be forced to increase their menu prices to account for the higher cost of fuel. This could have a ripple effect across the hospitality industry, as customers may notice slight increases in their dining bills in the coming weeks.
Furthermore, small-scale industries that depend on LPG for production processes could also see a rise in operational costs, potentially leading to an increase in the prices of goods they produce. The transportation sector, which also uses LPG, may experience similar effects, pushing up transportation costs for goods and services.
Regional Price Variations
It’s important to note that LPG prices vary across different regions in India, depending on factors such as local taxes and transportation costs. Therefore, while the price of a 19 kg commercial LPG cylinder has risen to ₹1,740 in Delhi, other regions may experience slightly different pricing. The revised prices will have a national effect, influencing businesses across the country that depend on LPG for their day-to-day operations.
Government Response
So far, the government has remained focused on ensuring that domestic LPG cylinder prices remain stable. In light of this commercial LPG hike, there is no immediate plan to offer subsidies or relief to businesses. However, businesses are calling for measures to mitigate the impact of rising fuel costs, particularly as they face ongoing financial challenges.
The situation is particularly concerning for small businesses, which may not have the financial resilience to absorb these price hikes without passing them on to consumers. The government’s focus remains on offering affordable LPG prices for domestic use, as seen with their recent decision to extend the ₹200 cooking gas price subsidy under the Ujjwala Scheme for another year. This subsidy helps low-income households afford domestic LPG cylinders and has been a cornerstone of the government’s efforts to alleviate the financial burden on households.
The latest increase in the price of commercial LPG cylinders is a significant development for businesses and industries that rely on these cylinders for daily operations. With the price of a 19 kg cylinder now at ₹1,740 in Delhi, businesses will face higher operating costs, which could translate to increased prices for end consumers. As industries adjust to the new pricing, the government has maintained stable domestic LPG prices, providing relief to households but leaving commercial users to cope with the increased burden. The ongoing rise in global fuel prices suggests that businesses may need to brace for further price hikes in the future.