LPG subsidy for BPCL consumers to continue post-privatisation – UPSC Current
LPG subsidy for BPCL consumers to continue post-privatisation
Why in News?
- LPG subsidy for BPCL consumers (BPCL) will continue post-privatisation of the nation’s second-biggest fuel retailers, Oil Minister Dharmendra Pradhan said.
What influences LPG prices in India?
- Domestic prices of liquefied petroleum gas (LPG) are based on a formula the import parity price (IPP), which is based on international LPG prices.
- Saudi Aramco’s LPG price acts as the benchmark for the IPP and includes the free-on-board price, ocean freight, customs duties, port dues and the like.
- This dollar-denominated figure is converted into rupees before local costs — such as local freight, bottling charges, marketing costs, margins for oil marketing firms and dealer commissions and the GST are added. This helps the government arrive at the retail selling price for LPG.
- The government resets the LPG price every month, the decision being influenced by international prices and how the rupee has behaved against the dollar in the immediately preceding weeks.
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