Kerala Chief Minister Oommen Chandy today rejected reports of hike in the prices of LPG after Petroleum Minister Veerappa Moily clarified that no increase had been effected.

"I came to know about the reports regarding the LPG price increase while the cabinet meeting was on. Immediately I contacted Union Minister Moily and what he told me was that no increase had been effected."

Moily said the Centre had only decided to implement the direct transfer of the subsidy component on the domestic LPG to bank accounts of the beneficiaries.

He also said his ministry would be issuing a statement later in the day to clarify on this, Chandy said.

In case of direct cash transfer, Kerala had been given a grace period of two months since the Aadhaar-linking of the bank accounts of the LPG customers had not exceeded 50 per cent, the Chief Minister said, adding he would once again call Moily to seek further clarification.

If the report of hike was true, the state Government would forgo the VAT accruing to its exchequer due to the increase in the price of LPG cylinders, he added.