Central And State Tax On Lpg In India 2021 (July) Read!

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Central And State Tax On Lpg In India 2021 (July) Read! >> The guide shares details about price hikes and taxes the government collects on the household cooking gas.  

Petrol price crossing the century mark is making bigger headlines in India. After petrol, kerosene and cooking gas price has increased much steeper. Since they are the two most valuable fuels used in the Indian kitchen, the average class population is struggling significantly after central and state tax is imposed on LPG.

The price of LPG (Liquefied Petroleum Gas) is, however, very steeper in 2021. A cylinder of 14.2KG costing Rs 594 last year is now available for Rs. 834.5 in the national capital. Many people want to know the Central and State Tax On Lpg in India 2021.

How is LPG Price decided in India?

The cooking gas price in India is determined based on the import parity price formula or IPP. IPP is based on global product prices. The contract prices of Saudi Aramco are considered the basics for the calculation. It includes Aramco’s LPG prices, ocean freight charges, free-on-board price, port dues, and customs duties. 

Dealer commissions, bottling charges, local freight charges, margins of OMCs, marketing costs, GST are other factors for determining the final retailing price of LPG in India. The Central and State Tax On Lpg in India 2021 is also decided based on the fluctuating prices of INR.     

The global value of INR is the factor that urges the state and central government to hike the Indian rates of LPG.

Why LPG Price Increases?

The Indian Basket of Crude Oil Price has significantly hiked from $20.20 per barrel in May 2020 to $65.54 per barrel in March 2021. The LPG gas in India is the blend of butane 60% and propane 40%. So, the prices of these two chemicals are considered crucial when deciding the Central and State Tax On Lpg in India 2021.

Saudi Aramco decided $625 per metric ton price for a term contract, up by $20. Butane’s price heightened by $10, and it is a 171% hike since May 2020, and the propane price also increased by $10 per metric ton.  

Besides, the exchange rate is also considered, and it declines to Rs. 73.29 from the average rate of dollar at Rs. 76.23 per dollar. Since the value of INR is important when deciding the LPG price, the rate hiked when the per dollar value declined as compared to the INR.

Central and State Tax On Lpg in India 2021 – How Much Tax Collected on LPG in 2021?

The price of LPG gas will be increased from July 2021, and the price of the LPG is decided on the first of every month. On a per KG basis, the price is likely to increase from Rs 42 to Rs. 59 or 40% per KG. 

The central and state taxes account for the bulk of retail prices. Besides, the revenue collection from the fuel sales was Rs. 52 537 Cr in 2013, and it increased to Rs. 2.13 LAKH CR in 2019-20, and within a time frame of eleven months, the price rose to 3 LAKH Cr in 2020-21. 


The Central and State Tax On Lpg in India 2021 is decided on multiple factors, and the price of LPG is decided on the first of every month. 

As per the sources, there is no indication yet about the price hike and central and state taxes on the LPG price in July 2021.

Do you have anything to add about the price hike of Liquefied Petroleum Gas (LPG)? Would you like to share it in the comments section?  

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