LPG prices may go up by Rs 103

Indian Oil Corporation, the country's largest oil firm, has sought an increase in price of domestic cooking gas LPG by over Rs 103 per cylinder and PDS kerosene by Rs 7.5 a litre, in view of rise in cost of raw material.

International LPG and Kerosene prices have risen by almost 200 per cent to $374 dollars per tonne and $382 per tonne respectively.

But, domestic LPG and Kerosene prices have not kept pace with the changes with only LPG price being raised marginally by Rs 20 per cylinder.

"The accumulated under realisations are mounting up, month after month, due to the sustained increase in the international prices of these products, affecting the cost price," IOC director (marketing) N G Kannan wrote to the petroleum ministry on February 1.

Based on the January 2005 prices, ex-storage point price of LPG should be increased by Rs 7307.19 per tonne (Rs 103.76 per cylinder) and kerosene by Rs 7579.72 per kilolitres (Rs 7.58 per litre).

"We request that the above increase in ESP may be allowed with immediate effect," he wrote. The government subsidy on LPG and Kerosene has remained static despite the worst ever increase in crude oil prices in 2004.

Besides the oil companies have also not been allowed to raise retail prices in step with the international prices, resulting in huge under-recoveries.

For the 2004-05 fiscal, IOC has estimated it loss on LPG and Kerosene sale at Rs 7566.80 crore (Rs 75.66 billion).