New Delhi, July 27 (TIWN) You may not have noticed it but the price of subsidised cooking gas rose by an average of just less than Rs 10 per cylinder per month in the July-June 2019-20 period, taking the price of common man's fuel closer to market rates.

What this has done is to stop consumers receiving any subsidy in their accounts for buying domestic LPG cylinders at market rates for the past three months, believing low oil prices in the market has eliminated the need for the subsidy.

But had oil companies refrained from consistently raising the price of subsidised cooking gas as well, from a level of Rs 494.35 a cylinder in July last year to Rs 594 now, a 14.2 kg domestic LPG cylinder price would have been more than Rs 100 cheaper, providing relief to consumers during the Covid-19 pandemic.

Under the direct benefit transfer scheme (DBT), the government provides subsidy on 12 cylinders a household uses in a year. While consumers buy cooking gas at market rates, the calculated subsidy amount is transferred directly into their accounts.

"Together with frequent increase in price of subsidised cooking gas and a fall in global oil and product prices, the government has completely eliminated their oil subsidy burden on account of LPG since May this year. With oil prices expected to be range blind closer to current levels, the government may not need Rs 37,256 crore as LPG subsidy provided in FY21," said an energy sector expert asking not to be named.

The current price of subsidised LPG cylinder is around Rs 594, the same rate as LPG cylinder prices prevailing in the market. According to an analysis done by Emkay Global, oil companies' under-recovery in case of kerosene has come to a naught since March while that for LPG has become zero from May.