Gas Cylinder Price: Anticipation is building for Budget 2025, with Finance Minister Nirmala Sitharaman set to unveil it on February 1. Many are hopeful, and leaders from various sectors have voiced their requests to the government.
Expectation that the government will address the Oil Ministry’s needs in this budget
There’s a strong expectation that the government will address the Oil Ministry’s needs in this budget. Historically, when subsidies for LPG cylinders are announced, it results in financial strain for oil companies. The Oil Ministry reports that Indian Oil has incurred a staggering loss of Rs 9,000 crore from selling LPG cylinders below their production cost. They are seeking Rs 40,000 crore to cover the LPG subsidy provided by the government.
Domestic LPG cylinders was slashed by Rs 100
In a notable move on International Women’s Day, March 8, 2024, the price of domestic LPG cylinders was slashed by Rs 100. It is anticipated that the Finance Minister may allocate Rs 40,000 crore to the Oil Ministry in this budget. When government-owned oil companies sell LPG cylinders at a loss, they face significant financial challenges, which the government compensates.
Last year, the government allocated Rs 22,000 crore to cover losses for the financial year 2022-23. Indian Oil Corporation, BPCL, and HPCL are the primary suppliers of LPG cylinders. The government imposes a 5% GST on these cylinders. If the Oil Ministry’s requests are granted, it could lead to benefits for the general public, including potential reductions in domestic LPG cylinder prices.
Additionally, the Confederation of Indian Industry (CII) has called for a decrease in excise duty on petrol and diesel to ease the burden on consumers. Meeting this demand could result in lower prices for these fuels, providing further relief to the public.