Prices may drop by Rs 350 a cylinder.
Richa Mishra
New Delhi, Nov. 23 Both the players and the customers of non-domestic liquefied
petroleum gas (LPG) have something to look forward to next month. Public and
private players of the product are betting on a significant drop in prices to
revive their fortunes, as it would push demand.
In keeping with the prices in the international market, price of LPG sold for
non-domestic purpose is expected to dip in December. The international market
has seen the biggest drop in LPG pricing by $320 a tonne from $810 a tonne in
September-October.
Industry sources told Business Line that the The price of commercial LPG, which
is sold in a 19-kg cylinder at over Rs 1,000 a cylinder, is expected to come
down by Rs 350. The dip in commercial LPG prices would also mean that the
diversion of domestic LPG for commercial use will be reduced to some extent, as
the price gap between the two categories would narrow.
Auto gas sector to gain
Due to high prices, the growth in auto gas sector was almost nil in the first
six months of the current fiscal. However, the coming six months should be
good, industry sources said. The auto gas sector had seen a growth of nearly 40
per cent in last fiscal. However, a robust growth can be expected only next
fiscal, industry sources added. Commercial LPG has seen a growth of about
seven-eight per cent.
The domestic prices of commercial LPG are reviewed on a monthly basis. In
November, the prices increased by a little over 1 per cent, as international
prices had seen an upward movement in October and the rupee had depreciated by
almost 20 per cent.
While the price of commercial LPG was increased to Rs 1,108.50 a cylinder (Rs
1,095.24 a cylinder in October), that of auto LPG was brought down by 5.34 per
cent. Auto LPG prices were revised to Rs 34.38 a litre on November 1 (Rs
36.32). In case of auto LPG, the public sector oil marketing companies are
under pressure to keep it at a price lower than the price of petrol in order to
make it attractive for the consumers.
"There is a time lag of four to six weeks between the international and
domestic LPG prices. The domestic price depends on the Saudi Arabian price and
currency value during the month under review," an official explained. In other
words, the domestic pricing is based on the formula of M-1 (price of the
previous month). Hence, the December price would depend on the international
price of November.
The last one week has seen international LPG prices declining after being
stable for sometime, even when there was a sharp slide in crude oil and other
petroleum products prices.
LPG for non-domestic purpose is meant for commercial markets such as hotels and
for auto LPG.
http://www.thehindubusinessline.com/2008/11/24/stories/2008112451580100.htm:
Opportunity is missed by most people because it is dressed in overalls and
looks like work.
Thomas A. Edison
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