We have always seen petrol prices skyrocketing but for the past few months even the LPG and CNG prices are showing a steep increase. The government has once again hiked the price of LPG (liquefied petroleum gas) and CNG (compressed natural gas) prices by Rs. 6 per litre and Rs. 4.70 per kilogram respectively. The LPG price hike has happened across the country while CNG price hike has only happened in Gujarat. The price of CNG remains unchanged in the rest of the states.
The reason for this hike is the depreciating value of the Indian Rupee against the dollar and also the hike in global crude oil prices. Since the commencement of the year 2012, this is the third price hike and car and auto-rickshaw owners who relied LPG and CNG fuel then, are now quite disappointed.
image – LPG Run Car
Compared to the earlier prices, LPG now sells at Rs. 49.72 per litre against the previous Rs. 43.65 per litre, while the CNG is now available at Rs. 50.20 per kg against the earlier Rs. 45.50 per kg (in state of Gujarat). On March 1st 2012 also, LPG prices were hiked from Rs. 40.7 to Rs. 43.65, and now it becomes 25 % pricier than what it was three months back.
Domestic LPG is heavily subsidized by the Indian government and the price hike does not affect it. Now that the auto LPG has shown a significant hike, it becomes less economical to run an LPG car than a diesel one. This will definitely boost the demand of diesel run cars. The recent hike could slow down the sales of LPG and CNG vehicles as it makes less sense to buy such vehicles now. However people who do care about mother nature and our environment will go with LPG and CNG vehicles as both these fuels are cleaner and produce least amount of emissions.
The move is expected to increase the already high demand for Diesel cars in India and will probably cause more waiting periods for the buyers as the car makers are already struggling to fulfill the abrupt rise in the demand for diesel cars for past one year or so when the difference in prices of petrol and diesel have widened like anything !