India Sets Plans in Motion To Ease Soaring LPG Prices
- 30-May-2022 5:58 PM
- Journalist: S. Jayavikraman
Soaring LPG prices are skyrocketing in the Indian market on the back of soaring crude oil prices globally. Even though this price hike will not last long, the Indian government officials stated that reducing the current high prices is vital. Suppose the officials opt to wait for LPG prices to cool down. In that case, it will have a destructive impact on the recovering Indian economy and make the revival of oil consumption in the domestic market harder. So, the officials have decided to take a few steps to ease the oil price since the price hikes affect various goods, services, and transportation and will likely harm the country's economy.
Instead of waiting for prices to cool down, the officials take several methods to reduce the LPG prices, like exclusive duty cuts and finding better crude oil deals to counter the reduced consumption of LPG in April 2022 in the domestic market. On May 21st, 2022, the Indian government reduced the taxes by two rupees to bring down the high inflation rates. Duty cuts also mean reduced revenue for the government, so for now, the government will watch the price of upstream crude oil and then act on taking any additional measures.
As for reducing the price by finding alternate crude oil sources, India is ready to pounce on any opportunities of utilizing Russian crude. India is contemplating getting crude from Brazil, but the freight charges to bring crude oil from Brazil to India are expensive and won't provide the required margins expected by the Government.
According to ChemAnalyst, India's consumption of LPG dropped a bit in April 2022 owing to high prices, but the demand is constantly rising. With the current global condition of the upstream crude oil, the LPG prices are likely to rise despite the Indian Government's best efforts.