LPG price hike on hold in K’taka

Consumers in Karnataka, Kerala and Madhya Pradesh, who pay more for LPG cylinders due to additional state levies, may heave a sigh of relief! The Centre Wednesday put on hold a hike in cooking gas prices in these states till consultation with states on state-specific-levies is over.

The move, which comes a day after non-subsidised LPG price was increased by Rs 16.50 per cylinder, will apply to all categories of domestic LPG cylinders – subsidised and non-subsidised.

Besides excise duty levied by the Centre and VAT by the state governments, certain other local levies such as entry tax, octroi and input tax restrictions on VAT are applicable in some states.  Consequently prices have risen by Rs 3 in Karnataka, Rs 4.50 in Kerala and as high as Rs 5.50 in Madhya Pradesh. Consumers in Uttar Pradesh too pay Re 1 more for domestic LPG cylinders than their counterparts in neighbouring states.

On the other hand, a reduction in state levies led to a cut in LPG prices by Rs 9.50 per cylinder in Assam, Rs 1.50 in Bihar and Rs 3 per cylinder in Maharashtra. Rates of kerosene sold through the public distribution system fell by 11 paise per litre in Maharashtra and Rs 1.32 per litre in Navi Mumbai. “In order to ensure that revenue demands of certain states don’t become a burden for consumers across the country, the Government had introduced the scheme of State Specific Costs (SSC) on July 24, 2012, to recover such irrecoverable levies from the consumers of the state/municipal area levying such taxes,” a petroleum ministry statement said.


There was a small increase of 2 paise and 8 paise in PDS kerosene rates in Haryana and Uttar Pradesh, respectively. The petroleum ministry ordered that kerosene rates too be put on hold till the Centre consults states on these matters. The move by the ministry comes ahead of the quarterly revision of prices by oil companies later this month. The government, however, has spared the states where reduction in state levies have led to lower LPG and kerosene prices.

“The interest of consumers being of utmost importance to the government, it has decided to insulate the consumers from the impact of any increase in the Retail Selling Price of domestic LPG and PDS kerosene due to revision of SSC,” the statement said.


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