LPG price up Rs3.46 per cylinder as oil firms hike dealer commission

The retail price of domestic cooking gas (LPG) has gone up by Rs3.46 per cylinder after state-run oil marketing companies on Tuesday raised the commission paid to dealers by over 9 per cent.

"The commission paid to dealers has been increased by Rs3.46 per 14.2-kg cylinder to Rs40.71. Consequently, retail selling price of domestic LPG too has been increased in the same proportion," petroleum ministry sources said.

The increase in commission, which is passed on to consumer, will push up the cost of LPG in Delhi to Rs413.96 per 14.2-kg cylinder from Rs410.50.

Oil marketing companies had, in October last year, increased dealers' commission rates thereby raising LPG price from Rs399 per cylinder to Rs410.50.

Similarly, the cost of a 5-kg LPG cylinder in Delhi will go up to Rs354.70 for the consumer while the dealer commission will increase by Rs1.73 to Rs20.36 per bottle.

Oil ministry officials said the dealers' commission is raised annually on the basis of increases in expenses like salary and wages.

Dealers get an additional 75 paise per cylinder commission for sale of non-subsidised 14.2-kg cylinder. This, however, stands unchanged, they said.

Non-subsidised LPG is sold at market price of Rs1017.50 per cylinder in Delhi.

LPG dealers' commission was last revised on 7 October 2012 when it was raised from Rs25.83 per 14.2-kg cylinder to Rs37.25 while the commission on 5-kg cylinder was hiked from Rs13.30 to Rs18.63 per bottle.

Dealer commission on LPG has increased by more than 240 per cent over the past six years - from Rs16.71 per 14.2-kg LPG cylinder in February 2007 to Rs40.71 today.