After the fifth increase in LPG refill prices since December 2020, except for a meagre cut of Rs 10 on March 31, 14.2 kg LPG refill will now cost Rs 834.50. However, BJP supporter Rishi Bagree shared a tweet listing LPG cylinders since 2011 and claimed that non-subsidised LPG gas is 32% cheaper than its price during the UPA government.
Year LPG Price
2011 тВ╣ 877
2012 тВ╣ 922
2013 тВ╣ 1021
2014 тВ╣ 1241
2015 тВ╣ 606
2016 тВ╣ 584
2017 тВ╣ 747
2018 тВ╣ 609
2019 тВ╣ 695
2020 тВ╣ 594 (lockdown)
2021 тВ╣ 834Non Subsidised LPG Gas is 32% cheaper than in UPA time.
тАФ Rishi Bagree ЁЯЗоЁЯЗ│ (@rishibagree) July 2, 2021
Bagree had tweeted the same earlier in February and in 2020. The claim was widespread on Twitter and Facebook. In the past, Bagree has shared misinformation on multiple instances.
A similar narrative is regularly pushed on social media тАУ that despite the recent increase in LPG price, refills cost cheaper than their price during the UPA rule. 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 had made such posts in February.
Year LPG Cylinder Price
2011 тВ╣ 877
2012 тВ╣ 922
2013 тВ╣ 1021
2014 тВ╣ 1241
2015 тВ╣ 606
2016 тВ╣ 584
2017 тВ╣ 747
2018 тВ╣ 609
2019 тВ╣ 695
2020 тВ╣ 594
2021 тВ╣ 719Will #AndolanJivi @RahulGandhi explain to people why his Govt looted them for years?
тАФ C T Ravi ЁЯЗоЁЯЗ│ р▓╕р▓┐ р▓Яр▓┐ р▓░р▓╡р▓┐ (@CTRavi_BJP) February 19, 2021
On Facebook, several users shared this claim in the form of a screenshot of the above-mentioned tweets or an infographic along with Bengali text, amongst other formats.
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 neither subsidised prices nor the international price of LPG have 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 a 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 cited in Pune Mirror from the same year. Alt News couldn’t find a report that stated the non-subsidised LPG price of 14.2 kg LPG cylinder was тВ╣ 877 in 2011. A 2011 report by Aaj Tak stated that the non-subsidised price reached тВ╣ 710 in July and could increase to тВ╣ 800. Readers should note that the viral message carries a typo where тВ╣ 809 is written as тВ╣ 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)
What does a 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 тАФ such as local freight, bottling charges, marketing costs, margins for oil marketing firms and dealer commissions and the Goods and Services Tax тАФ 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 тАФ 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 which said 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.
Posted above is a screenshot from a document by Petroleum Planning & Analysis Cell that lists the historical monthly prices of various petroleum products since April 2011. The last column lists cash transfers by oil marketing companies towards uncompensated costs under direct benefit transfer of LPG in Delhi. As one can see, the column states ‘0’ for all months since last 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.
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