National general secretary of Bharatiya Janata Party (BJP) Chikkamagaravalli Thimme Gowda Ravi and National vice president of Bharatiya Janata Yuva Morcha (BYJM) Santosh Ranjan Rai posted a tweet that listed prices of LPG cylinder since 2011. Both pointed out and asked why were the prices higher under the Congress-led United Progressive Alliance (UPA) government. Their tweets gained over 10,000 retweets.
Year LPG Cylinder Price
2011 ₹ 877
2012 ₹ 922
2013 ₹ 1021
2014 ₹ 1241
2015 ₹ 606
2016 ₹ 584
2017 ₹ 747
2018 ₹ 609
2019 ₹ 695
2020 ₹ 594
2021 ₹ 719
— C T Ravi 🇮🇳 ಸಿ ಟಿ ರವಿ (@CTRavi_BJP) February 19, 2021
The prices have also been shared with the message that ‘non-subsidised LPG gas cylinder prices in Delhi’ is cheaper during BJP’s rule. The claim is widespread on Twitter and Facebook. BJP supporter Rishi Bagree’s tweet was retweeted over 2,000 times. He had posted the same tweet in 2020. In the past Bagree has shared misinformation on multiple instances.
Fact-check: Misleading data
The viral list creates the impression that the price of LPG cylinders was much higher during Congress’s rule. However, this is a misleading representation of data as subsidised prices have not been considered.
In order to understand the price of LPG cylinders, this fact-check has been divided into:
- Analysis of the viral text.
- What does higher non-subsidised price indicate?
- How is LPG subsidised?
- Cost of 14.2 kg LPG cylinder after subsidy
Analysis of the viral text
The prices listed on social media are based on Indian Oil’s webpage that lists the cost of a non-subsidised 14.2 kg LPG cylinder in New Delhi. The data on the Indian Oil website dates back to December 11, 2013.
As for the prices in 2011 and 2012, we found that the 2012 prices in the viral text match with the one listed in Pune Mirror from the same year. Alt News couldn’t find a report that stated non-subsidised LPG price of 14.2 kg LPG cylinder is ₹ 877 in 2011. A 2011 report by Aaj Tak stated that non-subsidised price reached ₹ 710 in July and could increase to ₹ 800. Readers should note that the viral message carries a typo where ₹ 809 is written as ₹ 609 from the year 2018.
The table below shows a comparison between non-subsidised prices listed on Indian Oil against subsidised prices of 14.2 kg LPG in Delhi in the past 10 years. (view pdf) As evident, prices during UPA were lower.
What does higher non-subsidised price indicate?
LPG prices in India are based on international LPG prices. The 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 Goods and Services Tax — are added. The local costs more or less have remained constant. 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 (The Hindu).
A higher domestic price of non-subsidised LPG indicates that the international LPG cost was high. Domestic prices are dependant on petroleum by-products propane and butane prices. The historic cost analysis of propane on Trading Economics, a world economics data website, concur with trends observed in FOB prices at Arba Gulf — LPG cost more during 2013-2014 as compared to 2014-2021. In fact, Trading Economics pointed out that propane’s price was at an all-time high in February 2014.
As per the price build-up of 14.2 kg LPG cylinder listed by Hindustan Petroleum Corporation Limited (view pdf), the leading factor determining LPG prices is the ‘Free On Board’ (FOB) price of LPG. FOB is a weighted average of Saudi Aramco contract price (CP) for Butane (60%) & Propane (40%) for the previous month and also includes daily quotes of premium/discount (published by Platts Gaswire) averaged for the previous month.
We found a similar break-up listed for the years 2013, 2015, 2016 and 2018 in the Ready Reckoner report by Petroleum Planning & Analysis Cell and found that FOB prices are essentially the international price benchmark.
How is LPG subsidised?
The government regulates LPG prices via subsidy or/and under-recovery. In a 2012 interview with The Hindu, Indian Oil Corporation Chairman RS Butola explained, “Under-recovery is the difference between the procurement price of products and their selling prices.”
This cost is borne by the government or oil marketing companies. Since 2014, the gap between non-subsidised and subsidised cylinder rates have reduced. As per the Petroleum Planning & Analysis Cell (view PDF), the under-recovery amount has been nil since May 2020. The same was reported by The Hindu Business Line in 2020. Thus, as of today, LPG cylinders are not subsidised. Alt News confirmed this by contacting the customer care helpline of Indian Oil.
Each connection is entitled to a fixed number of subsidised 14.2 kg LPG cylinders in a year. This number has changed multiple times over the years. It typically ranges between 6-12. More details are available on Hindustan Petroleum’s website which states that at present the cap is 12 cylinders per year.
In 2015, the BJP government launched ‘Give It Up‘, an initiative to encourage domestic LPG consumers who can afford to pay the market price for LPG to voluntarily surrender their LPG subsidy. In 2019, the government declared that over one crore consumers surrendered their LPG subsidy. The average subsidy offered on 14.2 kg LPG cylinder from 2017-2020 (September) can be viewed on Petroleum Planning & Analysis Cell.
On February 23, Minister for Petroleum and Natural Gas and Steel Dharmendra Pradhan told ANI, “Reports of stopping LPG subsidy are baseless. We are still providing subsidy to the consumers of remote and interior areas of the country. Eight crore beneficiaries of Pradhan Mantri Garib Kalyan Yojana got 14 crore LPG cylinders free of cost during the lockdown period.” However, the cost of 14.2 kg LPG for a majority of citizens has increased during the BJP government despite the fact global LPG prices have come down.
Cost 14.2 kg LPG cylinder after subsidy
The cost of a 14.2 kg LPG cylinder paid by the end consumer can be ascertained by analysing the subsidised cost. Readers should note this price varies from region to region in India. Typically the prices of metro cities are cited on the official websites and media reports for reference. One can view the current LPG prices in any district on the consumer portal of Hindustan Petroleum.
Several social media users, including BJP leaders CT Ravi and Santosh Ranjan Rai, shared the cost of non-subsidised LPG cylinders and portrayed that prices were higher during the Congress government’s rule.
Based on our research, it is evident that non-subsidised LPG prices were higher during the Congress government’s term because the global LPG prices were high. However, since the Congress government provided LPG cylinders at subsidised prices, the cost was lower than the current amount borne by the end consumer. From 2014 onwards, the international LPG prices have reduced yet the cost of 14.2 kg LPG cylinders is higher because the BJP government has stopped subsidising the LPG on retail price. However, as per Minister for Petroleum and Natural Gas and Steel Dharmendra Pradhan eight crore beneficiaries of Pradhan Mantri Garib Kalyan Yojana got 14 crore LPG cylinders free of cost since the lockdown in 2020.