In a letter dated 3 October, sent to the oil marketing companies (OMC), the ministry, however, said that the revision in the distribution commission would not result in a revision in retail LPG prices.

It said the government approved the “revision of distributor’ commission to ₹73.08 per 14.2 kg cylinder (establishment charges: ₹39.65 and delivery charges: ₹33.43) and ₹36.54 per 5.0 kg cylinder (establishment charges: ₹19.82 and delivery charges: ₹16.72)”.

In May last year, the ministry had set the commission for the 14.2 kg domestic cylinder at ₹64.84.

The new notification said the ministry has also approved the conduct of a fresh study to recommend a revised methodology for the determination of distribution commission for domestic LPG. The revision comes at a time when the government has been announcing measures to curb LPG prices in view high retail inflation and upcoming state elections.

The Union cabinet on 4 October approved an additional subsidy ₹100 on cooking gas for Pradhan Mantri Ujjwala Yojana (PMUY) beneficiairies taking the total subsidy to ₹300 for over 95 million beneficiaries. Further, last month the cabinet approved slashing LPG prices by ₹200 per cylinder.

PMUY beneficiaries pay ₹603 per cylinder of cooking gas which normally costs ₹903 in the national capital.

The government rolled out PMUY to expand the LPG network and provide cleaner cooking fuel to poor households. The beneficiaries were identified either from the socio economic caste census (SECC) list or from seven other identified categories such as scheduled caste households, scheduled tribe households, most backward classes and beneficiaries of PM Awas Yojana (Gramin).

On 13 September, the cabinet, approved the extension of PMUY for release of 7.5 millon LPG connections over three years from FY2023-24 to 2025-26, a move which expected to take total number of PMUY beneficiaries to 103.5 million.

Under PMUY, government bears an expenditure of up to ₹1600 per connection for security deposit (SD) of cylinder, along with other charges.

This increase in LPG distributor commission also has raised hopes among petrol pump dealers for an increase in their commission, said representatives of petrol pump associations.

“Petrol pump dealers are happy for the commission hike given by the ministry after a long time. Petrol dealers margin has not been increased since the last 6 years and the expenditure for running a petrol pump has sky rocketed since 2017. Petroleum dealers are hoping for a similar hike sooner than later,” Anurag Narain, Convenor, Forum of Like Minded States, a lobby group of pump dealers and former president of the Delhi Petrol Dealers Association.

“Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!” Click here!

Updated: 05 Oct 2023, 10:56 PM IST