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New Delhi, Feb. 12 (PTI): Cooking gas LPG price on Wednesday was hiked by a steep INR 144.5 per cylinder due to spurt in benchmark global rates of the fuel.
But to insulate domestic users, the government almost doubled the subsidy it provides on the fuel to keep per cylinder outgo almost unchanged.
LPG price was increased to INR 858.50 per 14.2 kg cylinder from INR 714 previously, according to a price notification of state-owned oil firms.
This is the steepest hike in rates since January 2014 when prices had gone up by INR 220 per cylinder to INR 1,241.
Domestic LPG users, who are entitled to buy 12 bottles of 14.2-kg each at subsidised rates in a year, will get more subsidy.
The government subsidy payout to domestic users has been increased from INR 153.86 per cylinder to INR 291.48, industry officials said.
For Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries, the subsidy has increased from INR 174.86 to INR 312.48 per cylinder.
After accounting for the subsidy that is paid directly into the bank accounts of LPG users, a 14.2-kg cylinder would cost INR 567.02 for domestic users and INR 546.02 for PMUY users.
The government gave out 8 crore free LPG connections to poor women under PMUY to increase coverage of environment-friendly fuel in kitchens.
Normally, LPG rates are revised on 1st of every month but this time it took almost two weeks for the revision to take place - a phenomenon which industry officials said was due to approvals needed for such a big jump in subsidy outgo.
Others said the decision to defer the increase could have been because of assembly elections in Delhi. Delhi voted on February 8.