Reason to cheer: LPG prices cut by Rs 113 as oil slumps below $65/barrel

New Delhi: Price of non-subsidised cooking gas (LPG) was today cut by a steep Rs 113 per cylinder and that of jet fuel (ATF) by 4.1 per cent as international oil rates slumped to multi-year lows.

A 14.2-kg cylinder of non-subsidised LPG will now cost Rs 752, down from Rs 865 previously, in Delhi, oil companies announced today.

This is the fifth straight reduction in rates of non-subsidised or market priced LPG, which the customers buy after exhausting their quota of 12 cylinders at subsidised rates, since August.

In five monthly reduction, non-domestic LPG rates have been slashed by Rs 170.5 per cylinder, bringing the price at three-year lows.

On similar lines, the price of aviation turbine fuel (ATF), or jet fuel, at Delhi was cut by Rs 2,594.93 per kilolitre, or 4.1 per cent, to Rs 59,943 per kl. This is the fifth straight monthly reduction in rates.

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This reduction follows a steep 7.3 pr cent or Rs 4,987.7 per kl, cut in prices on 1 November.

Since August, ATF prices have been cut by 14.5 per cent or Rs 10,218.76 per kl and rates have dipped below Rs 60,000 per kl level for the first time in three years.

Brent, the benchmark grade for more than half of the world’s oil, have dropped to USD 68.34 a barrel, the lowest level since October 2009. Prices declined 18 per cent last month and are 38 per cent lower in 2014.

In Mumbai, jet fuel will cost Rs 61,695 per kl from today as against Rs 64,414.98 per kl previously. The rates vary because of differences in local sales tax or VAT.

Jet fuel constitutes over 40 per cent of an airline’s operating costs and the price cut will ease the financial burden of cash-strapped carriers.

No immediate comment was available from airlines on the impact of the price cut on passenger fares.

The three fuel retailers – IOC, Hindustan Petroleum Corp and Bharat Petroleum Corp – revise jet fuel and non-subsidised LPG prices on the first of every month, based
on the average international prices in the preceding month.

Yesterday, oil companies had cut petrol price by 91 paisa a litre and diesel by 84 paisa per litre. The seventh reduction in price since August has meant that petrol costs Rs 63.33 a litre in Delhi, Rs 10.27 per litre less than what it cost in July.

The third reduction in diesel rates in one month has led to price coming down to Rs 52.51 a litre.

Non-subsidised LPG in Delhi was priced at Rs 922.50 in July and rates have in every subsequent month been reduced.

PTI