Data | LPG prices skyrocket to ₹999.5, cylinder usage in rural areas under 45%

High prices and no subsidy are the reasons for poor usage of LPG as 99.8% of households have an LPG connection

With the increase in LPG prices, households in the city now have to pay Rs. 1,002 for refill. File photo | Photo Credit: NAGARA GOPAL

The price of subsidised domestic LPG increased by over ₹400 between November 2020 and May 2022 in India. The rapid rise was due to two factors. One was the drastic fall in the LPG subsidy amount that was being directly transferred to consumers’ accounts since 2015. In recent days the sharp rise in international LPG prices have added to the burden. Due to high prices, close to 60% of the households in India are using clean cooking fuel (electricity, LPG/natural gas, biogas) according to NFHS-5 (2019-21). In rural areas, close to 45% of households use clean cooking fuel. High prices and no subsidy is the reason for the poor usage as 99.8% of households have an LPG connection.

No subsidy

Since May 2020, no subsidy has been announced for domestic cylinders in Delhi. Following a sharp rise in international LPG prices, consumers have been paying higher rates, which on May 7 rose to ₹999.5 per cylinder in Delhi.

Chart appears incomplete? Click to remove AMP mode

FOB prices

The chart shows the international free on board (FOB*) price of LPG in $ per metric tonne between January 2019 and March 2022. The FOB price of LPG has been on a rising trend and in March 2022, it was the highest in at least the past three years. Due to the absence of subsidy, the hike in FOB price is now borne by the consumer.

Low usage

While 99.8% of households in India have LPG connections as of 2022, only 59% used clean fuel for cooking according to data from NFHS 5 (2019-21). Each circle corresponds to a State/U.T. The chart plots the State-wise share of households with an LPG connection against the share of households that used clean fuel for cooking.

Chart appears incomplete? Click to remove AMP mode

Urban-rural disparity

The chart plots the share of households that used clean fuel for cooking in urban and rural areas . The use of clean fuel for cooking was significantly lower in rural areas. In Gujarat, the usage was as high as 94% among the urban households while it was only 46% in rural households.

Source: PPAC, NFHS

Note: *Weighted average of Saudi Aramco contract price for butane (60%) & propane (40%) for the previous month and also includes daily quotes of premium/discount (published by Platts Gaswire) averaged for the previous month.