The price of a 19 kg cylinder of commercial liquefied petroleum gas (LPG) in Chennai rose to ₹1,254 on Wednesday from last month’s ₹1,144.50, much to the disappointment of customers, mostly hoteliers who have been urging the government to reduce the value-added tax (VAT) of 18%.
For an industry already reeling under the impact of the COVID-19 lockdown, an increase in LPG prices adds to financial woes.
“Many hotels and restaurants have not opened despite the government permitting us to have dine-in services. They feel they are better off being closed rather than bear electricity and LPG costs. We had been seeking reduction in VAT, which, if given, will provide some relief,” said M. Ravi, Chennai Hotels’ Association.
Adding to their troubles is the fact that traditionally LPG price in Chennai has been higher than that of other metros. Mumbai has the lowest price (₹1,087.50 for July) since it is on the western coast. It is followed by Delhi (₹1,139.50), which gets LPG via pipeline from Gujarat and then Kolkata (₹1,193.50), said oil industry sources. Under normal circumstances, sale of commercial LPG forms about 10%-15% of cooking gas sale in Tamil Nadu. However, due to the lockdown, this figure had come down to around 5%.
R. Srinivasan, a hotelier from Madurai, said the hotels were not in a position to increase prices of food since it would deter even the few customers that they get.
