State-run oil marketing companies on Wednesday cut the price of commercial LPG cylinders by Rs 183.5 and aviation turbine fuel (ATF) by Rs 5 per litre, according to a report by Business-Today. The reductions follow an easing of global crude prices from the highs seen during the peak of the West Asia conflict and the abatement of supply concerns with the reopening of the Strait of Hormuz.
Price Reductions Across Fuels
The price of a 19-kg commercial LPG cylinder has been reduced by Rs 183.5 to Rs 2,930 in Delhi. The 5-kg Free Trade LPG (FTL) cylinder, commonly used by migrant workers, roadside eateries and street vendors, also became cheaper by Rs 13 and now costs Rs 808.5. ATF for domestic airlines now costs about Rs 110 per litre.
Private fuel retailer Nayara Energy rolled back the price increases it had introduced during the conflict, reducing petrol prices by Rs 5 per litre and diesel by Rs 3 per litre across its 7,000-odd retail outlets.
| Fuel Type | Previous Price | New Price | Change |
|---|---|---|---|
| 19-kg commercial LPG cylinder (Delhi) | Rs 3,113.5 | Rs 2,930 | -Rs 183.5 |
| 5-kg Free Trade LPG cylinder | Rs 821.5 | Rs 808.5 | -Rs 13 |
| ATF (per litre) | ~Rs 115 | ~Rs 110 | -Rs 5 |
| Petrol (Nayara) | +Rs 5 (conflict surcharge) | Normal | -Rs 5 |
| Diesel (Nayara) | +Rs 3 (conflict surcharge) | Normal | -Rs 3 |
There has been no change in the price of the 14.2-kg domestic LPG cylinder (Rs 942 in Delhi), CNG (Rs 83.09 per kg), or petrol (Rs 102.12 per litre) and diesel (Rs 95.2 per litre) sold by state-run Indian Oil, Bharat Petroleum and Hindustan Petroleum.
Drivers of the Price Cuts
Both commercial LPG and ATF are deregulated fuels and their prices are revised on the first of every month in line with international benchmark rates, the report noted. The latest revision reflects the easing of global crude prices as supply concerns abated with the reopening of the Strait of Hormuz.
The price cuts come days after energy supplies to India began normalising, with refiners securing adequate crude oil and LPG cargoes and officials indicating that imports from West Asia had returned close to pre-conflict levels.
Regional Variations in Commercial LPG
The 19-kg commercial LPG cylinder now costs Rs 2,884 in Mumbai, Rs 3,072 in Kolkata and Rs 3,099.5 in Chennai. Prices vary across states due to differences in value-added tax.
Background of the Conflict
Commercial LPG prices had risen by a cumulative Rs 1,373 per cylinder across four successive revisions after the conflict broke out. Wednesday's revision is the first reduction since the de-escalation of tensions in West Asia.
During the disruptions, the government kept petrol and diesel prices unchanged for nearly 75 days despite a sharp rise in international oil prices, before raising them by a cumulative Rs 7.5 per litre in four revisions. It also introduced temporary measures, including restrictions on retail sale of fuel to commercial buyers and a mechanism to stabilise jet fuel prices for airlines.
Supply Normalisation
With supplies improving and international crude prices easing, the government last week lifted the restrictions on commercial LPG supplies, restoring supplies to pre-conflict levels. It also allowed the sale of petrol and diesel to commercial buyers from retail outlets as before and removed the 200-litre-per-customer cap on diesel sales.
The latest price cuts mark the first broad-based easing in transport and commercial fuel prices since the West Asia conflict disrupted global energy markets.
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